Livre qui parle de Comment devenir riche en détails. On y apprend pleins de choses pratiques et surtout philosophiques sur la poursuite de la richesse.
Clairement cette voie n’est pas pour tout le monde et fait partie de la Folie contrôlée.
Highlights
How to Get Rich
Anyone not busy learning is busy dying
How to Get Rich
I employ a great many people smarter than I am. That’s not false modesty, that’s a stone-cold fact. The only two reasons such geniuses continue to work for me and put money into my pocket are that, on the positive side, they enjoy their work, and on the negative side, they fear losing what they have already gained—challenging work, congenial colleagues, a certain status and the promise of promotion and pay raises.
How to Get Rich
They know this as well as I do. (They are far from fools, otherwise I would hardly employ them.) But fear holds them back, with the exception of those rare individuals who are content with their lot.
How to Get Rich
And what is fear? “Fear is the little death, death by a thousand cuts,” goes the ancient Japanese saying. Nifty, but ultimately unhelpful. Similar to Shakespeare’s “Cowards die many times before their deaths: / The valiant never taste of death but once.” But is fear really the father of cowardice? Let’s leave that to the philosophers. In business, in the accumulation of wealth, it is an impediment, for sure. But then, so is recklessness. No, I believe that it is the fear of failure which looms largest here. And fear of failure is definitely something that can be dealt with, and will be dealt with at length in this book. (See Chapter 3: Harnessing the Fear of Failure.)
How to Get Rich
Boldness attracts applause, as the writer and philosopher Goethe once remarked in doggerel: Whatever you can do, or dream you can, begin it! Boldness has genius, power and magic in it.
How to Get Rich
If you can afford it, always get someone else to do the grunt work. See Chapter 13: The Joys of Delegation
How to Get Rich
making money is a drug. Not the money itself. The making of the money. This sounds like so much hoopla, but it’s true, all the same. Nobody believed that exercise could prove addictive until science stepped in and discovered “endorphins” or whatever the damn things are called. And making money, I assure you, is a hell of a lot more of a rush than jogging. Up to just seven years ago I was still working twelve to sixteen hours a day making money. With hundreds of millions of dollars in assets I just could not let go. Like I said, it was pathetic.
How to Get Rich
Eventually I found a way out. I handed over day-to-day control of my businesses to younger and mostly smarter boys and girls. I cleaned up my personal life. I began doing what I wanted to do—not what I felt I had to do. After all, what did I have to prove? Except, perhaps, to myself.
How to Get Rich
If the odds of getting rich put you off, then you deserve to stay poor. Or, to put it more kindly, whether you deserve it or not, you will stay poor.
How to Get Rich
“Once begun—the job’s half done.” Because taking that first, irrevocable step has proved to be the most difficult part of nearly every venture I have been involved in. In the memorable words of the American philosopher and poet Ralph Waldo Emerson: No matter how much faculty of idle seeing a man has, the step from knowing to doing is rarely taken.
How to Get Rich
there is nothing wrong with robust debate, either with others or with oneself. What is undesirable, however, is the pretense that any such debate can resolve the risks involved in advance. It cannot. All debate can do is clarify, support or contest the next step. The risks remain, however much talking is done. It is for this reason that committees are discouraged on the battlefield. A commander may be proved wrong. He may be proved right. But prompt decisions and orders, right or wrong, are far healthier than endless debate and prevarication. This applies equally to a debate within one’s own mind
How to Get Rich
Fretting is counterproductive at any level. And so is lack of action. Knowing that fear of failure is holding you back is a step in the right direction. But it isn’t enough, because knowing isn’t doing.
How to Get Rich
Fear of failure and the avoidance of blame, then, is what drives Jeremiahs and haunts them. To be fair, it haunts all of us. In essence, it comprises two components. The first is our natural desire to avoid letting ourselves or others down, perhaps with calamitous financial repercussions. The second is the exposure of that failure to the outside world.
How to Get Rich
I know my mother well. I know beyond a shadow of a doubt that everything I have achieved I owe not just to care and love, but to her genes. She could have built herself a fortune had she wished. Her personality combines the resilience, the drive and the restless energy of so many people who become rich
How to Get Rich
To sum up then, if you wish to be rich, you must grow a carapace. A mental armor. Not so thick as to blind you to well-constructed criticism and advice, especially from those you trust. Nor so thick as to cut you off from friends and family. But thick enough to shrug off the inevitable sniggering and malicious mockery that will follow your inevitable failures, not to mention the poorly hidden envy that will accompany your eventual success.
How to Get Rich
sniggering and mockery prior to any attempt to better yourself financially, followed by envy later, or gloating during your initial failures—these are three certainties in life. It hurts. It’s mindless. And it doesn’t mean anything. But it will happen. Be prepared to shrug it off. The Germans have a superb word for the (secret) pleasure humans obtain from the misfortunes of others. It is schadenfreude—from schaden meaning “harm” (from which we get the word “shadow”), and freude meaning “joy.”
How to Get Rich
Those of you who are definitely going to be rich will recognize it often enough in the faces and body language of idiots around you. It is the price you must learn to pay for any attempt to raise yourself in the world. And I suspect that was as true ten thousand years ago as it is today.
How to Get Rich
Before we really get started on getting started, I ask you to consider carefully the short list below. It is by no means comprehensive, nor will it be the last list in this book, but should you find yourself unable to measure up to even one of these initial demands (and I mean just one), then my suggestion is that you close this book and give it to a friend.• If you are unwilling to fail, sometimes publicly, and even catastrophically, you stand very little chance of ever getting rich.• If you care what the neighbors think, you will never get rich.• If you cannot bear the thought of causing worry to your family, spouse or lover while you plow a lonely, dangerous road rather than taking the safe option of a regular job, you will never get rich.• If you have artistic inclinations and fear that the search for wealth will coarsen such talents or degrade them, you will never get rich. (Because your fear, in this instance, is well justified.)• If you are not prepared to work longer hours than almost anyone you know, despite the jibes of colleagues and friends, you are unlikely to get rich.• If you cannot convince yourself that you are “good enough” to be rich, you will never get rich.• If you cannot treat your quest to get rich as a game, you will never be rich.• If you cannot face up to your fear of failure, you will never be rich.
How to Get Rich
The truth is that getting rich means sacrifice. And the worst of it is, it isn’t always you that’s doing the sacrificing. You must get used to that, or give up the quest. This is not a calling for the fainthearted. There is no shame in turning away. After all, if everyone was prepared to make the necessary sacrifices, who would be left to work for my own companies?
How to Get Rich
Here is my suggestion. Think of this fear not as the King Kong of bogeymen, but as a mare. A nightmare. A mare, after all, is a horse. A horse can be tamed, bridled, saddled, harnessed and (eventually) ridden. Harnessing the power of such a creature adds mightily to your own. Thus the nightmare of prospective failure provides you with the very opportunity you are seeking. Not only does it restrain smarter people than yourself from becoming rich—and there can only be so many rich people in the world—it affords you the chance of increasing your confidence, both when you confront it and when you master it.
How to Get Rich
Just at the very time hormonal chaos, acne, drugs, alcohol, sport, fashion, gadgets, cars, music, body piercing, partying and sex are emerging as matters of compelling interest, we find ourselves faced with an eternal mantra about earning a crust. All of this is irritating in the extreme, mostly because it harps upon what is patently obvious—that one day we are going to have to make a living. And yet, there is a kernel of wisdom buried in the pulp of these parental and family concerns. The truth is that the vast majority of people doing the asking did not choose their own career. Either they stumbled into it or they were pushed.
How to Get Rich
“What do you want to be when you’re grown up?”
How to Get Rich
Until one is committed, there is hesitancy; the chance to draw back; always ineffectiveness concerning all acts of initiative and creation. There is one elemental truth, the ignorance of which kills countless ideas and splendid plans: that the moment one commits oneself, Providence moves all. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issue from the decision, raising in one’s favor all manner of incidents and meetings and material assistance which no one could have dreamed would come his or her way. —JOHANN WOLFGANG VON GOETHE
How to Get Rich
We do not choose our parents. We do not choose our nationality. We do not choose who we fall in love with. We do not even choose the personality or character of the children we bring into the world or our own personal characteristics—random configurations of DNA do it for us. But we do get to choose, if we are determined enough, what it is we want to do for a living. Most of us flunk this test. Me, for instance. My career as an entrepreneur magazine publisher came about entirely by accident.
How to Get Rich
Most parents and teachers reading this are not going to like my answer. It’s this: none of it matters a damn if you want to get rich. This is not to say that “the Search” is not important to young people. It’s important and it’s scary and it’s fun and infuriatingly confusing. For most people, it occurs in their twenties or very early thirties
How to Get Rich
too much choice for younger citizens. Nobody but an idiot would deny this is a good thing—even a wonderful thing. But choices are confusing. They take time to consider, to sample, spit out and reject. And too many of them provide a ready-made excuse for procrastination and shilly-shallying. Not to mention fantasizing
How to Get Rich
working too long for other people can blunt your desire to take risks. This last factor is crucial, because the ability to live with and embrace risk is what sets apart the financial winners and losers in the world.
How to Get Rich
If you want to be rich, you are not looking for a “career,” except as a launch pad or as a chance to infiltrate and understand a particular industry. A job for the rich-in-training is merely something to keep you ticking over, to put food on your plate and wine in your glass.
How to Get Rich
Additionally, it will provide excellent training in management and negotiation skills; it will supply inside market information; above all, it will act as a salutary reminder of what happens to 99.99 percent of your colleagues—the ones who buy lottery tickets and dream of becoming rich but who haven’t a hope in hell of achieving any such thing.
How to Get Rich
Sounds pretty arrogant and selfish, doesn’t it? Not exactly “playing the game” or exhibiting what a human resources manager would call “a constructive team attitude.” But then, who ever heard of a rich human resources manager? Right. Neither have I
How to Get Rich
You should have no long-term, or even medium-term, requirements of the first two or three companies you work for. Promotion is always welcome and brings with it the opportunity to learn more, but you are there to ensure that you take every opportunity to suck out the marrow of what you need to know, to understand it and place it within a greater context for a future purpose. The purpose of getting rich.
How to Get Rich
Team spirit is for losers, financially speaking. It’s the glue that binds the losers together. It’s the methodology employers use to shackle useful employees to their desks without having to pay them too much
How to Get Rich
While lives may depend on it in a few professions, like soldiering or firefighting, in commerce it acts as a subtle handicap and a brake to ambitious individuals. Which, in a way, is what it’s designed to do.
How to Get Rich
That’s an ugly thing to say, but unless you realize and accept that you cannot be “one of the boys,” that your bosses and you are not “in this thing together,” that only those who refuse to be conned by the idea of “team spirit” in the workplace can succeed—unless you come to fully comprehend and understand all this, then you will only make other people rich. You will receive their heartfelt thanks and maybe a gold watch when you retire. But you will not get the money!
How to Get Rich
It’s the same with close friends and family members. Consciously and outwardly they may want you to succeed beyond your wildest dreams. But subconsciously, often without being aware of it themselves, they might be far happier if you failed or only succeeded to a limited degree.
How to Get Rich
It’s a selfish world out there. But, hey! when you’ve piled up your first few million in the bank, you can salve your conscience by giving generously to your relatives. Or by promoting young managers and waffling on to them about “team spirit” in your own business. Not that the brightest of them will believe you for a moment. (They’re the ones you promote fastest, by the way.)
How to Get Rich
What else is there to consider during the Search? Some industries are more enticing and glamorous than others. Some require huge investment to get off the ground and some can be made to work in an attic or a garage. And some are growing while others are in decline. Should you choose only to work in glamorous, growing industries? Where is the most opportunity to be found?
How to Get Rich
First off, forget glamorous. One of the richest self-made men I know digs holes in the ground to dispose of household waste. That’s not how his company describes itself in its annual report, but essentially that is what it does, along with building incineration plants. Glamorous? No. But in a good year he puts £20- £30 million on the bottom line and earns a gross margin of over 20 percent. That’s a sensational result for a small, wholly owned private company. Not to mention that the relentless growth of the packaged-goods industry ensures that his business will grow and grow
How to Get Rich
While you may not necessarily want to be in a glamorous sector of any market, and they are often very crowded sectors, it helps to be in a growing one. Swimming with the tide rather than against it, so to speak. A swelling tide raises all boats, including yours.
How to Get Rich
The laws of supply and demand are absolute—and they apply not only to commodities, but to people. Too many people want to make a blockbuster movie and live in Beverly Hills. Not enough people want to dig holes.
How to Get Rich
New or rapidly developing industries, whether glamorous or not, very often provide more opportunities to get rich than established sectors. The three reasons for this are availability of risk capital, ignorance and the power of a rising tide.
How to Get Rich
Investors are drawn to emerging industries in the hope of making a fast buck. To get rich, you will need capital, and to acquire capital you need to be where loose capital is searching for a home. In addition, the combination of ignorance and misconception that surrounds any new market or technology works in your favor. If you are quick at grasping concepts and jargon, you become an “instant expert.” The owners of capital love “experts.”
How to Get Rich
I’ve had personal experience of this craziness. Back in the late 1970s I knew nothing of personal computers. And I mean, literally, nothing. The only PC I had ever seen was built by a nerd from a kit. It appeared to allow the nerd and his fellow nerds to play a pathetic video game called “Pong.” On top of that, it permitted like-minded nerds to converse with each other in a jargon beyond the understanding of non-nerd mortals. To sum up, PCs were for trainspotters. This was not exactly promising ground for an entrepreneurial publishing company. Even so, the enthusiasm of these nerds and of science journalists in the mainstream press concerning the potential of personal computers was growing. To cut a long story short (and a story which has still not ended thirty years later), my tiny little company became “instant experts” on personal computing. We launched magazine after magazine on the subject, both trade and consumer based, and established several exhibitions. Our acquisition of apparent “expert” knowledge, together with all our new launches, bred respect among our vendors, primarily paper merchants and printers. They vied to offer us far better credit terms than they would normally have considered offering. This provided me with desperately needed capital to expand.
How to Get Rich
As magazine publishers, we could not hold a candle to our bigger rivals, and no one knew this better than they. But at least we appeared to know what we were doing, which in turn attracted editorial talent who really did know. Better still, the tide of personal computing technology rose high—higher than anyone could have predicted, and it rose quicker than anyone had thought possible.
How to Get Rich
Here was the power of a new market at work. By the time our bigger rivals were comfortable enough to launch against us (a hesitation resulting from ignorance), the tide had carried us beyond the reach of their big guns. New capital, ignorance and a rising tide had done the trick. In this instance, the Search had paid off in spades
How to Get Rich
As a general rule of thumb, then, growing industries with relatively low start-up costs offer more opportunities for those who want to get rich than declining industries, or those that require huge start-up investment. This is not an iron-clad rule, however. While magazine and newspaper sales have been in slow decline in the Western world for decades, this “declining” industry is where I made a great deal of my own money
How to Get Rich
More important than any particular industry are the sectors within each industry. A sizable fish in a growing sector, however small, is more attractive to prospective purchasers and investors than the same size fish in a diminishing or static pond.
How to Get Rich
This is one of the factors in stock-market bubbles—all growth is good (as far as investors are concerned), while all decline is fatal. I happen to believe that such sentiments are flawed. But what I believe is immaterial. It’s what the providers of capital believe that counts, no matter how illogical
How to Get Rich
After all, what are banks and venture capitalists but usurers who offer you an umbrella when the sun is shining and snatch it away the instant a few rain clouds appear?
How to Get Rich
I do know of a few examples of self-made multimillionaires from static industries, especially in commodities, publishing and precious metals, who were lucky enough to persuade banks and venture capitalists to back them with millions of dollars. Of course, this means that they rarely remain in control of their own destiny.
How to Get Rich
Capitalism demands that whoever takes the most financial risk calls the piper’s tune. The biggest rewards go not to those individuals who came up with the idea, nor to those individuals who built the empire. They go to those entities or individuals who funded the enterprise and own the most stock. Always bear this in mind during the Search.
How to Get Rich
This is the system you are pledged to both join and beat. To join because you need to get rich. And to beat because you have insufficient capital. Either by appearing to join those who will financially back you (while holding on grimly to every piece of stock you can), or by piecing together just enough success to borrow enough money to grow without disposing of your sacred shares. (See Chapter 12: Ownership! Ownership! Ownership!)
How to Get Rich
Depressingly, the only way for a start-up entrepreneur to succeed is often to part with equity in return for an infusion of capital. But never forget that no matter what promises or verbal guarantees you receive from investors during the Search, the issue will eventually come down to control. And control, even by a single percent of the shares of a business, the fabled 51-49 percent split, is often the be-all and end-all of the game.
How to Get Rich
Whoever controls a business can force its sale. Whoever controls a business can implement a merger. Whoever controls a business can fire you. Whoever controls a business, even by a pitiful 1 percent, is likely to take a great deal more money out of it than the minority shareholders. Remember, too, that in both private and public companies, not all shares are necessarily equal, either in voting power or financial value. Choosing a growing industy, or growing sector of a static industry, can free you from such financial control freaks.
How to Get Rich
To gain control of a company, investors often pay well over the odds. However, those still clinging to the residue, even though they are protected from “oppression” by the majority shareholder in law, rarely see equal value when all is said and done. For a minority shareholder who helped found a company, this can be a bitter pill to swallow. They may even have sold some of their shares to ensure the company’s viability, only to discover that having won such a battle, they have lost the war. This is especially true in start-ups, and even more true in start-ups that do not require substantial capital investment. While engaged in the Search yourself, spare a thought for the software giants of today, most of which were founded in basements, spare bedrooms and garages a quarter of a century ago. They went through the Search themselves. The search for a niche. The search for funding.
How to Get Rich
So how to choose the arena in which you intend to carve yourself a fortune? There are usually three factors involved in the Search: inclination, aptitude and fate.
How to Get Rich
Your inclinations really do count. You have to pay attention to them. If, like me for example, you abhor television, then it probably isn’t a good idea to move into that industry,
How to Get Rich
If you love art, but cannot paint or sculpt to save your life, then perhaps you can still make your millions in the art world—providing you possess not only a natural affinity and sense of aesthetic, but the wit to spot and winkle out talent in young artists
How to Get Rich
Plus the ability to sell, which is usually nothing more than a talent for hype and keeping a straight face as you demand a fifty times markup from potential buyers who wouldn’t know a Damien Hirst from a pickled sardine.
Note
Selling is based on ignorance. Idée de business: contactez moi si vous pensez qu’un service est peut-être trop cher et je ferai baisser le prix ou trouverai un équivalent moins cher
How to Get Rich
Cherish your inclinations and affinities. Though not infallible, they may well lead you in the right direction. But do not fall into the error of making a fetish of your passion
How to Get Rich
One of the best salespeople I ever employed, and one who was so conscious of her ability that I was forced to pay her nearly twice the salary and bonus of her immediate boss, now lives in Cornwall and paints watercolors. They are not very good watercolors, in my opinion. But neither my opinion, nor the promise that she would be a multi-millionaire before she was thirty-five, proved a sufficient inducement to keep her nose to the grindstone. The aptitude for selling advertising was obvious, and was the envy of all her colleagues. But her inclinations led elsewhere. She is happy as far as I know and I wish her all the luck in the world. But she will never be rich. Fortunately, she says she has no wish to be.
How to Get Rich
So how do you judge your own aptitudes? Trial and error is the only way I ever heard of. The problem is that we create an image of ourselves in our childhood and youth (often at the urging of parents, siblings or friends), and subsequently attempt to graft reality onto this image. More often than not, the graft doesn’t take and the result is bewilderment and disappointment. Far better to ruthlessly analyze what your particular aptitudes are and act upon them rather than attempt to graft an oak tree onto a dandelion.
How to Get Rich
If you are still young, here is where the advice of a godparent, a trusted teacher or lecturer, or even a career counselor can prove useful, bearing in mind that impartiality is a better guide than parental pride. Your parents, likely as not, will be of little use here. Their love for you may well blind them to the harsher realities of your true abilities and potential.
How to Get Rich
Of course, such discussions cannot make you rich. But they can really help in the Search. They can build confidence, a key element in risk taking, and the only way I know of to get rich from a standing start. And they can inform you, too, of your weaknesses, which in turn can protect you from spending your working life making other people rich—the probable fate of nearly everyone you currently know.
How to Get Rich
“It won’t do, man. It’s not that you can’t sing … sure you can do a fair imitation of Chuck Berry or whatever, but people don’t pay for imitations. You gotta find your own voice or stick to editing your magazines.” “Mick Jagger does it,” I protested. “Yeah, but Mick always sounds like Mick, no matter what he sings. You just sound like a copycat. Your voice changes with each song.” It wasn’t what I wanted to hear at twenty-four, especially from a guy like John Lennon. But it was so demonstrably true that after a few more hopeless shots at “finding my own voice,” I did the only sensible thing and quit any pretense that I was going to make it in the music business. Lennon was being cruel-to-be-kind to a young man in his twenties—which is exactly what a mentor must be to anyone of that age
How to Get Rich
Inclinations are easy to list. Aptitude is far less so. Trial and error, combined with fierce determination and a willingness to discard cherished perceptions about ourselves, is the best that I can suggest.
How to Get Rich
How many of us at that age know somebody to whom we can say: “What do you truly believe my strong points to be?” and expect a meaningful answer? And even if we can find someone we feel comfortable discussing such a subject with, how many of us know anyone whose opinion is worth the potential embarrassment?
How to Get Rich
It is highly unsatisfactory and frustrating that the most important decision we are likely to consciously make leaves so very much to chance. A small success, though—even a tiny success—can provide a clue. It was my own success at selling magazines on the street that led me to begin to publish them eventually. Which leads to fate. To chance. To serendipity
How to Get Rich
It is the instinct to seize an opportunity when it presents itself that perhaps sets apart the self-made filthy rich from the comfortably poor, the willingness to ignore conventional wisdom and risk everything on what others consider to be folly.
How to Get Rich
Their ability to take chances and to subsequently exploit initial success counted more than their inclination toward a particular industry. Their execution of a strategy trumped the subject of their obsession. Luck? Fate? Chance? Although I am reluctant to even write these words, without them, it appears, nothing can be done. (See Chapter 10: A Few Words About Luck.) While it infuriates me to admit it, there are just too many people I am acquainted with who appear to draw bad luck to them for this not to be so. If the influence of luck is a delusion, then all I can say is that the delusion is virtually universal.
How to Get Rich
To put it less fancifully, they were lucky in the Search and skillful in their follow-up. Boldness helped. Conquering fear of failure helped. Persistence helped. But, without some luck, no one can get anywhere in the search to discover the exact arena in which to do battle, the arena that suits an individual’s aptitudes and inclinations.
How to Get Rich
Boldness? The most successful generals or admirals in military history shared one characteristic: they were willing to ignore orders and risk utter disgrace in order to exploit rapidly changing circumstances. When the chance came, they recognized an opportunity, weighed the odds swiftly and placed their lives and careers on the line to snatch a victory. (Not to mention the lives and careers of those around them.)
How to Get Rich
The three great quotes concerning “luck” for me are these: “Luck is preparation multiplied by opportunity.” — SENECA, ROMAN PHILOSOPHER “The harder I practiced, the luckier I got.” — GARY PLAYER, GOLF CHAMPION “Luck is a dividend of sweat.” —RAY KROC, MCDONALD’S FOUNDER
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Fortune favors not just the brave but the bold. Boldness has a kind of genius in it, as Goethe pointed out.
How to Get Rich
Here is the key, then, in the Search. Whatever your inclinations, your aptitude, your abilities or your preferences, never shrink when opportunities arrive. If you have weighed the odds and find yourself convinced, ignore the protestations of sensible people and their conventional caution.
How to Get Rich
Chances come to everyone in life, in all shapes and sizes, often disguised, and more often radiating risk and potential humiliation. Those who are prepared to analyze the risk, to bear the humiliation and to act in deadly earnest—these are the “lucky” ones who will find themselves, when the music stops, holding a potful of money. But then, in reality, they made their own luck. They never stopped searching. Perhaps they spent months or even years searching in the wrong place. Or possibly they hit upon the object of their search at the first attempt. No matter. Having found what they needed where they needed it, and having done what they judged needed doing, their search is over. And it is they who will become rich.
How to Get Rich
It is good to have a goal. True believers in a “great idea” are often obsessed with achieving a particular goal. Such an obsession, properly harnessed, can produce wealth. Sadly, that wealth rarely finds its way into the pockets of the person whose obsession created it. As far as this book is concerned, their goal was flawed even though their aim was true.
How to Get Rich
Having a great idea is simply not enough. The eventual goal is vastly more important than any idea. It is how ideas are implemented that counts in the long run. Good ideas are like Nike sports shoes. They may facilitate an athlete who possesses them, but on their own they are nothing but an overpriced pair of sneakers. Specially adapted sneakers may be a good idea. But the goal is still to win, and sports shoes don’t win. Athletes do.
How to Get Rich
yet I have lost count of the number of men and women who have approached me with their “great idea,” as if this, in and of itself, was some passport to instant wealth. The idea is not a passport. At most, it is the means of obtaining one.
How to Get Rich
Ray Kroc, of McDonald’s fame, did not invent the idea of “fast food.” Humans have been stuffing their face “on the run” since the dawn of history. His genius was merely to recognize this fact and implement a simple five-point plan: standardize the food and prices, franchise the outlets, produce the food swiftly in clean surroundings, offer value for money and market the whole shebang relentlessly. Easy to state; hard to implement. And it flew in the face of all conventional wisdom concerning the sale of fast food at the time.
How to Get Rich
There is another side to the subject of ideas in commerce. Stealing them. Or to put it more pleasantly, emulating them. The error of failing to emulate a winning idea pervades every industry at all levels. Mainly this is due either to indolence or to folly. Of indolence, no more need be said. The folly, on the other hand, often takes the shape of a peculiar affliction, known colloquially as the “it wasn’t invented here” syndrome. I would place this affliction very high on the list of reasons preventing individuals and companies from achieving major success.
How to Get Rich
Future had signed up virtually all the “official” games magazine publishing rights that mattered. Even today, I shudder at the thought of the wasted blood, sweat and treasure we expended on our games magazines. Dennis Publishing failed in the electronic games market because we would not (and later, could not) emulate a winning idea
How to Get Rich
What I should have done was to take my best men and women in the company and send them to Japan, Europe or America. Or anywhere where Sega, Sony and Microsoft and the rest would agree to meet with us. We should have wined, dined and cozied up to them. We should have searched for another vehicle via which the popularity of such games could be exploited. If no other vehicle could be found, we should have tried trumping Future’s offers worldwide. Cash is a great persuader. If this wouldn’t fly, we should have exited the market. We did none of these things, in any meaningful way, and we paid the price. We were pasted because we refused to emulate.
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The Upside-Down Pyramid for Getting Rich 1. Commit or don’t commit. No half-measures. 2. Cut loose from all negative influences. 3. Choose the right mountain. 4. Fear nothing. 5. Start now. 6. Go!
How to Get Rich
IPC’s deadly rival, EMAP, immediately set about revamping a tiny men’s fashion title they had acquired called FHM (For Him Monthly), possibly the worst-named magazine in history. But names don’t count, as pop groups like the Rolling Stones or the Beatles demonstrate.
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The lesson is clear. Despite the words of the old rock ’n’ roll song, the original is not the greatest. Not always. If you want to be rich, then watch your rivals closely and never be ashamed to emulate a winning strategy. They may josh you a little for doing it, but that’s a price well worth paying.
How to Get Rich
If you never have a single great idea in your life, but become skilled in executing the great ideas of others, you can succeed beyond your wildest dreams. Seek them out and make them work. They do not have to be your ideas. Execution is all in this regard.
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If, on the other hand, you spend your days thinking up and developing in your mind this great idea or that, you are unlikely to get rich. Although you are likely to make many others rich. That is usually the way of it. Ideas don’t make you rich. The correct execution of ideas does
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There are only six ways of obtaining capital. You can be given or inherit it; you can steal it; you can win it; you can marry it; you can earn it; you can borrow it. The first four of these are beyond the compass of this book. All I will say about “winning it,” presumably by gambling, is that the odds are very bad indeed. It’s no way to get rich. It is true that certain people exhibit incredible ability in games of skill like poker. But in the end, the losing streaks always seem to become longer and the winning streaks shorter. Gambling, even for those at near-genius level, is time-consuming and totally exhausting. As for games of chance, I will not insult your intelligence by discussing them. The lottery is merely a pleasant name for organized racketeering. As to theft, leaving aside the morality of it, I do not believe the light to be worth the candle. The downside is too high and the upside too uncertain. Should you succeed in stealing a great deal of money, you will then spend many years looking over your shoulder in fear of discovery
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The French socialist Pierre Proudhon had the right of it: “Property is theft!” he thundered. Aye, so it is. But it is legalized theft, the main pillar of Western capitalism, a rotten and debased system of managing human affairs, and yet the only system that has survived the demise of all rivals.
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However we may feel about it, capitalism is the only system under which readers of this book are likely to labor. And as its name implies, it requires capital for those who wish to play the game and succeed. As to the fifth method of acquiring capital—earning it—this is a long-term game plan, although it is true that if you can demonstrate the ability to earn money early on, it does become somewhat easier to borrow from others successfully later. For the majority of people who start with nothing and seek to be rich, borrowing money in one form or another becomes a necessity sooner or later. Let’s explore the various options on the borrowing front.
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Firstly, avoid sharks like the plague.
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There are other predators in the sea, too, but nearly all of them demand punitive rates of interest. Anyone who has borne the burden of a loan that sucks the lifeblood from you week after week, month after month, leaving you exhausted and no further forward than when you started, will tell you what a terrible price such borrowings exact from the human spirit. Better to labor as a wage slave than as a beast of burden to a loan shark
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The only people I ever met who got insanely rich from a hedge fund operation were (you guessed it!) the managers of hedge funds.
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Many US providers of capital of any stripe now only wish to play ball in return for “a piece of the action”—not to mention the guaranteed return of the capital and interest if no action materializes! (In that sense, we were probably the victims of recent low interest rates, which have forced traditional bankers into a game of Darwinian evolution. If interest rates won’t bring home the bacon, then maybe “a piece of the action” will. Banks, like everyone else, have to evolve or die.) This, of course, is the premise upon which venture capitalists have always operated. Venture capital companies are one way to raise capital, for sure. But the price they demand is nearly always that you hand over a huge chunk of equity. More often than not, they also insist on a date by which your new venture must be sold, either back to yourself or to outsiders. Why? Because their own funds usually come from wealthy individuals who demand a high return within a limited time frame. This, in turn, leads many venture capitalists to move from an advisory to an operational role in any business in which they invest, cramping your style and scaring the pants out of everyone who works for you. Those wealthy investors in their own funds are unforgiving and merciless, and venture capitalists will therefore do anything it takes to protect and maximize short-term returns from your business.
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They aren’t so much sharks as dolphins—a nickname deriving from their frantic desire to “flip” every deal as quickly as possible. By “flipping, ” I mean a sale. They do not care who the venture is sold to (yourself or an outside party), but the return of their investment, with a massive bonus for the risk and skill they have invested, is mandatory.
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Venture capital money, dolphin money, is not for the faint-hearted. Too often, it is only for the desperate—unless building a business for a quick(ish) return and a small piece of the action is your goal. And there is nothing wrong with such a goal in the short term.
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If that is the case, then it’s worth remembering that the best of the dolphins can certainly boast a ton of managerial talent and experience. They tend to know what they are talking about in the abstract, if not in your particular niche. Dolphins can afford to hire such talent for the simple reason that they absolutely have to. Your successful venture-capital-funded business must also pay for the failures that the same venture capitalist invested in last year.
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Time and again I have watched existing companies wishing to expand, or new ventures anxious to get started, mire themselves with the slippery dolphins. A few of them succeed, and succeed gloriously, it has to be said. But a great many other original owners or creators are squeezed out long before the fabled “big pay day.” If you fail to grow your businesses swiftly enough, then flipper becomes agitated and noses in. His very survival (or at least his annual bonus) depends upon your performance that year. Flipper doesn’t care about long-term prospects. He doesn’t even care about long-term shareholder value. He only cares about growth—and he cares about it now.
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As with his co-denizen of the deep, the shark, he either keeps moving forward or he drowns—and you have no choice but to move forward or drown with him. Except it will not be his corpse spiraling down into the depths if things go wrong. He will live to fight another day. You, on the other hand, will be shark bait.
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Venture capitalist short-termism, with its eye firmly glued to the sale of an enterprise within three or four years, is the hallmark of nearly all venture capital activity. As is their insistence on a massive stake, often a controlling one, in any business they provide capital for. Experience has shown them that this control, combined with growth at almost any price, is the course most likely to return the profits they need to satisfy their own investors—the great fleas on their back.
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Believe me, they are hard taskmasters. But they may be the only way for you to really get started. More often, you will start up underfunded, on your own or with the fishes (we are coming to that), and only turn to the dolphins for the injection of capital you believe will propel you to the next level
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You will need a degree of success to exhibit to them. And you will need to be somewhat humble—except in your financial projections.
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I have been approached by venture capitalists on many occasions. They are not evil men and women; far from it. They are mostly smart, well connected, persuasive and passionate about success. But their first loyalty is to the quick buck. You do business with them at your peril. Be warned: with them, you may have a better than even chance of making your first million. But you will make them many, many more millions in order to do so. And you are unlikely to stay in control of your own destiny with any business they invest heavily in.
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Should you decide to approach venture capitalists, and by some miracle should they agree to back you, then I urge you to seek the finest legal advice that your money can buy for the ensuing negotiations. Just one sentence, even a phrase, within the initial contract can make all the difference in the world to the outcome a few years down the road.
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The dolphins are consummate professionals—to them you are just another amateur in the sea trying to stay afloat, to grow, to make his or her financial dreams come true. Amateurs are easy meat.
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Having avoided the sharks and perhaps swum with the dolphins, we turn to the fishes. How I love the fishes! How you will learn to love them, too! It was via the fishes that I made my own first money—the seed capital which ensured that I retained control and ownership of my own business back in the early days of Dennis Publishing. Fishes come in all shapes and sizes. Friends, acquaintances, relatives, business colleagues, small investors, friendly bank managers of the old school, professional advisors, ex-employers, suppliers and vendors are among them. But how can they be of any use?
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Let me illustrate by my own example. In 1972 I persuaded a jolly young lawyer I had met to act for me. His name was Bernie Simons. I had no money to pay him, but perhaps my chutzpah amused him. He helped me to register my £100 limited-liability company and provided me with at least a fig leaf of respectability. I think I paid him £20 for his services. The company was called H. Bunch Associates and I intended to publish a series of comic books. Next, I persuaded a close friend, Dick Pountain, to join me as codirector and production manager. There wasn’t much in the way of a salary on offer, but Dick came all the same. We “liberated” a few sticks of office furniture, two electric typewriters and a floor camera from the offices of OZ magazine (where Dick and I had met), which was then in the process of winding up.
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Another friend, Lemmy, later to become famous with the heavy-metal band Motörhead, mentioned that an acquaintance of his was vacating a garret in the West End—perhaps we could move in there?
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Lemmy was right about the empty flat. Three rooms at the top of the most rickety stairs I had ever climbed. The building had been badly damaged in the Blitz and never properly rebuilt. The last tenants had been breeding puppies there in straw pens. It took a long time to get rid of the stink of puppy shit. The place was a total dump, but at least we had an “office.” I reluctantly sold one of the electric typewriters and produced a deposit for the landlord.
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Next, a close friend and colleague, Richard Adams, designed some smart headed notepaper for us free of charge, suspecting (rightly) that we might be able to provide him with work if our venture succeeded. A small printer I had come to know while working for OZ magazine agreed to print this notepaper, knowing full well I could not pay him for it right then.
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A semi-friendly, amused bank manager at Barclays Bank in Tottenham Court Road opened an account for the company, into which I deposited the mighty sum of £50. A magazine distributor, Moore-Harness, with whom OZ had done business, agreed to distribute my product, although I had nothing to show them.
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All we needed now was content for our comic, and a printer to print it. The content was not a problem. We knew plenty of comic illustrators and they would not expect to be paid in advance. Indeed, some of them would not expect to be paid at all, and were surprised when we eventually managed to do so. The printing was the big stumbling block, of course. Somehow, I had to persuade a printer to provide machine time and paper to produce the comic we were busy preparing in the garret. The bill would come to a few thousand pounds.
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I had written a great many record reviews when I worked for OZ magazine. The record companies would send albums directly to my flat in the hope of soliciting a review and they never asked for the LPs back. I sorted out all the albums I could bear to part with and sold them to a local record shop. This brought in just sufficient funds to at least get a few printers to talk to me while Dick and I lived on £10 a week.
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unless I could guarantee that the printers got paid, not one of them, very sensibly, would budge. Then I had an idea. I asked Brian Moore and Charlie Harness, the owners of my potential distributors for the comic, to write to a particular printer, promising that he would be the first to receive money from Moore-Harness when the comic came out. Brian and Charlie did not guarantee the money; they were not exactly idiots. But they made it sound, as a matter of common sense, that at least enough money was likely to be generated by sales of the comic to pay the print and paper bill.
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And they stressed that their client, my little company, would only receive any residue when and if the printer had been paid in full. This was the key. Brian and Charlie turned out to be the most effective fishes in the pond of my ambition.
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the printer agreed to Moore-Harness’s proposal. I secretly suspect that he did so as much to keep me from constantly badgering him as anything else. Persistence is a powerful tool in the hands of a hungry young hustler on the make. And he probably did not wish to offend a powerful distributor like Moore-Harness. Distributors sometimes have a say in who gets to print what.
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Thus it was that the first issue of Cozmic Comics was unleashed upon an unsuspecting world. It barely made a cent, but it provided the framework for yet more publishing ventures. Within two years I had sixty thousand pounds in the bank. (That is the equivalent of half a million pounds today.) The printers were paid. The contributors were paid. The designers were paid. The landlord was paid. Bernie Simons got paid. Even Dick and I were paid. Above all, I retained control of the company. A company I still own 100 percent of thirty-five years later. I had created capital by swimming with the fishes.
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Without Dick’s expertise, or the kindness of a lawyer, or the trust of contributors and designers, or the amused tolerance of my distributors, or any of a hundred other encouragements from those around me, it simply could not have been done. I have read, in articles written about me since in newspapers and magazines, that fierce loyalty to old friends and colleagues is my best characteristic.
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Some will argue that what I did back in 1972 could not be emulated today. But human nature does not change and, at bottom, we are cooperative animals. Many people are indulgent toward the young—after all, we were all once young ourselves. Those who wish to start a company and get rich cannot expect a free ride. But they might be surprised at the number of fishes in their particular pond willing to help them to some degree or another.
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And look at the consequences in my own case:• Moore-Harness continued to distribute my magazines. When Brian and Charlie were forced to sell their company years later, I fought hard to ensure fair treatment for its two founders. By that time, I was in a position to return their original favor.• Dick Pountain is still a director of Dennis Publishing and the company has put food on his table for more than thirty years.• Our landlord was happy to sell me the building in which our garret was located decades later when he retired.• The printer went on printing for us until the day he sold up. As far as Dick and I were concerned, we owed him.• I continued to bank with Barclays for far longer than I should have done, solely from a sense of misplaced loyalty.• Richard Adams still designs projects for me.• And guess what? My legal advisors in the UK today are a firm named Simons, Muirhead & Burton, founded by none other than one Bernie Simons, a young lawyer who helped a kid on the make register his first company.• Lastly, to this day, I always do my best to encourage, or to be of some practical help, to others who wish to strike out on their own.
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Venture capitalists, major investors and bankers all have their part to play in providing capital for individuals and start-up companies. But if it is at all possible, give me the fish over the sharks and dolphins every time. It may take a mite longer to get there, but you’ll be far richer, or at the very least, happier, in the long run.
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One last word on obtaining capital. It’s the worst part of the whole business of getting rich. Nothing is more humiliating or debilitating than trudging the rounds with your hand out, no matter how good your project or fierce your determination. Everyone has to do it and everyone hates it. For a self-made man or woman there is no avoiding it
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Beware of anyone who tells you that there are short cuts to obtaining even a small amount of capital. Outside of family and friends, there are none that I ever heard of.
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Look on the bright side. Those lazy bastards who turn away from this odious task are going to be your employees. They are going to make you rich. In a sense, this exhausting and miserable search is what separates the wannabes from the gonnabes
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If you cannot bear the thought of prostrating yourself to obtain the seed corn, then you will almost certainly never own the farm. “To get what you need / You toady to greed.” Or else, you ask; very, very nicely indeed.
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Despite all my brave words earlier in the previous chapter, I never knew a worse few months than when I was bashing my head against a brick wall attempting to start my own outfit in the early 1970s. The whole process was pure misery.
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Looking back through the prismed eyes of a champagne flute, I suppose I could argue that perhaps it was my finest moment. Not that it felt like it at the time. To be honest, it nearly broke me. But I would not give in. That was the secret ingredient. I would not be a wage slave. I would not take “no” for an answer. I would not give in. I was going to be rich. Some how. Some way
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What fueled me was the desperation of knowing that unless I found a way around my lack of capital, unless I could pour my energy into a venture of my own, I would be condemned to a life of wage slavery
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I had had offers. One or two of them decent offers. There were people who believed I could make them money. And I could have done. It was tempting. My years working at OZ magazine had served as a fine apprenticeship (an apprenticeship I shall always be grateful for) and, as a result, I had met many people in the arts, the media and in politics
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So I knew I could run a business. I knew I could turn one around, if I had to. What I didn’t know was how the hell I was going to find the money to get started. In fact all I knew was—you guessed it—I would not give in.
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The next day, I went straight back to knocking on doors and punishing the phone, pestering people for capital. Learning how to swim with the fishes. No way was I going to spend my life making other people rich. No way was I going to become a token hippie in some record company. No way was I going to do any damn thing except get on the merry-go-round of making dough. Real dough. My dough. I would not give in. That is what it is like in the beginning. Always. It is desperate and it is humiliating. As you will find, in your own way, unless you were born with a rich mommy or daddy or uncle. For the rest of us, if you want to be rich, then you must walk a narrow, lonely road to get the capital to make it so.
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If you happen to read biographies, as I do (scores of them every year), you will find a thread that runs through almost any story of success against the odds. Whether money comes into it or not. Whether the person succeeded or failed. Or even, most sadly of all, when they did succeed, but did not live long enough to learn of their success. In one of the finest such books in the world, Letters to My Brother by the artist Vincent van Gogh, collected and published long after his death, you will find unbearable heartbreak, madness, rejection, hunger, passion, nightmare terrors and a tale of a man who never gave in. Who would not give in, though it cost him his life. Van Gogh’s obsessions and talents drove him mad. And he knew it. They goaded and scourged him. He said himself that he had given his life and half his sanity to his art. There was only one shining star of kindliness in his universe. His brother, Theo.
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Vincent often had no money. None at all. He would sell his paintings to peasants or innkeepers in exchange for food and board. Canvases that would later sell for tens of millions of dollars were exchanged for the roof of a barn and a breakfast or lunch. (I wonder if any of those canvases are still lying, undiscovered, in a dusty old Dutch attic?) His clothes were worn out. He wandered the countryside like a tramp. He knew himself to be a disappointment to his family and to those few friends who remembered his existence. He had been a disappointment to the only woman he ever lived with. He was certainly a disappointment to himself. Nothing went right, except, very occasionally, a particular painting. Above all, it grieved him to be a burden to his brother. But he would not give in. He would die first
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You must choose. Life is comfortable enough in the Western world for most people. In most parts of Europe there are the safety nets of the social services and of government-subsidized medical care. There are decent jobs at decent salaries with decent colleagues and a decent retirement; and all without the heart-stopping fear of bankruptcy, of years of risk amid fears of ignominious failure. Why do handstands on the rim of hell? Why bother to punish yourself in such a way? Nobody else does it—why should you? Go on, make everyone around you happy. Why not give in? If you are merely a wannabe, then the siren voices will prevail, and they will be right to prevail. If you are a gonnabe, then they will not prevail. Like Odysseus you will stop your ears with wax or bind yourself to the mast. You will learn to walk your narrow, lonely road—and to hell with the siren voices. You will not give in. And you will be rich.
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All error springs from flawed assumptions. If there are no assumptions, there can be no error.
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I am told that during the Vietnam War, a sign was kept nailed on a wall above a particular marine commander’s desk which said: “Assumption is the mother of all f***-ups.” Those seven words should be carved into the heart of every entrepreneur, the wealthy or the wannabe, the gonnabe or the been-there-done-that. A shame they weren’t nailed above the desk of the president of the United States at the time.
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As far as getting rich is concerned, the cardinal error is to begin such a quest in the vague belief that you would like to be rich. Wishing or desiring to be rich is perhaps the most commonplace of human desires, other than sexual fantasy. Yet few people ever succeed in achieving it.
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Wishing for or desiring something is futile without an inner compulsion to achieve it. Such lack of compulsion, if not frankly acknowledged, can lead to great personal unhappiness.
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Worse still, by continually wishing and never delivering, you risk denting your confidence, beginning a vicious downward spiral that appears to draw misfortune like a magnet.
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The assumption that you might be able to achieve some goal if you only wished hard enough is not just a f***-up. It’s a potential personal tragedy
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It is my hope that this book will cause you to consider very carefully whether you are truly driven by inner demons to be rich. If you are not, then my earnest and heartfelt advice to you is: do not on any account make the attempt
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What are riches anyway, compared to health or the peace of mind that even a modicum of contentment brings in its wake? In and of itself, great wealth very rarely, if ever, breeds contentment. Believe me, I know
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no condescension is intended whatever when I ask you to quietly turn over in your mind whether or not you are fit to be rich. Whether the sacrifices involved—not only your own, but those you will ask of your family, present or future—are worth the tyranny that such ambition, by its very nature, exacts.
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Never yet have I met a self-made rich man or woman whose family or personal relationships were not plagued by the burden of creating a fortune, even a small fortune.
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A rocky marriage; lack of time spent with their children; the substitution of expensive gifts to repress guilt created by their frequent absences from home; the concern that their children have grown used to privilege and are consequently slacking in their education or lacking in ambition—all of these come as part and parcel of self-made wealth. There is no escape, although each of us believes we can be the exception that proves the rule. Is this a price you are prepared to pay?
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Do not mistake desire for compulsion. Only you can know the song of your inner demons. Only you can know if you are willing to tread the narrow, lonely road to riches. No one else can know. No one else can tell you either to do it or to refrain from the attempt
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Why is it that cash flow is so often the cause of business failure? Most often, either the business is not a viable one, or it has expanded beyond its capacity to support its rate of expansion.
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You can delegate many tasks when creating a new business, but monitoring and forecasting cash flow is not one of them. It’s your responsibility and your task. Nobody else’s.
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Reinforcing failure sounds so easy to avoid. If something fails, stop doing it and start doing something else, right? Er, right. Except, just when do you decide that you have a “failure” on your hands? Too late, is the answer—always too late.
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Let’s examine the nature of success and failure for a moment. We know that success has a thousand fathers while failure is famously always an orphan. Not to mention a bastard. Then again, success has been described as the ability to go from one failure to another, unrepentant and with no loss of enthusiasm. All very well. But how the devil can we judge when a failure has occurred so that we can safely cease to reinforce it and move on? On this matter, all prophets, wits and gurus are silent.
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My own suspicion is that many failures are merely a matter of timing. What used to fail now succeeds. What once was a sure thing now no longer works. Take the invention of the fax. Fax technology existed for decades before fax machines were universally adopted. One day my office manager in the US walked me out in the hall to show me how to use our shiny new fax machine. “Why do we need one?” “Because everyone is getting one.” “OK, but why is everyone getting one?” “I don’t know. They just are.” As far as I could see, the technology had not improved much from the prototype I’d inspected a few years back. But now “everyone” was getting one. Failure had transmogrified into success. The fax had reached critical mass.
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Take another example. In 1977 (after years of arm wrestling with the powers that be), Sir Freddie Laker launched his transatlantic Sky-train service, an airline offering a no-frills service at about one third of the prices of his competitors—notably British Airways. It was a huge success for a while, then failed, collapsing into bankruptcy in 1982 with debts of over $600 million. Conventional wisdom in the City and on Wall Street labeled cheap airlines a flop. All of a sudden, here in the first decade of the 21st century, bingo! Cheap airlines are all the rage again and turning over billions of dollars of business around the globe. A failure one minute, a success the next. It was just a question of timing.
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What has all this to do with reinforcing failure? It is this possibility , the chance that we are onto a slow-burn winner, rather than being stuck with an out-and-out loser, that persuades so many of us (who should know better) to hang in there with a product or service in financial trouble.
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Now settle down, children, and I’ll tell you a real sob story. Ten years or so ago, I invested heavily in a new project, an interactive CD-ROM disc called Blender, based in New York City. Blender contained interactive reviews of new movies and albums, electronic games, animated cartoons, video interviews with celebrities and a host of other features. You stuck it in your computer to play it. Or view it. Or watch it. Or listen to it. It was a pioneering project that made a huge splash in the media world. The idea was to publish this CD-ROM every month, just like a magazine. We had a great marketing line for it, too. “Stay Cool: Stick Your Head in a Blender.” I loved it. So did the rest of the media. We won a zillion awards. The designers and editors were fêted and rivals began to prowl around the corridors wondering if Blender meant the death of ink-on-paper magazines. They needn’t have worried. Blender wouldn’t sell. Whenever we took it to focus groups or gave it away, kids and techies alike whooped and hollered and told us it was “so cool.” I upped the ante. We began advertising it and marketing it. We paid stores to carry it. We worked days and we worked nights. Sometimes I had to order the young men and women working on Blender to go home to bed, they were having so much fun. In our heart of hearts, we believed we were inventing a new media. We made plans for specialist Blenders, just like you have specialist magazines: Blender for cars; Blender for fashion; Blender for new movie releases. My tiny company was on fire with ideas. Some pop stars were so keen on Blender they let us have unreleased music videos and tracks from their forthcoming albums to include on our CD-ROM that month. The publishing trade press wrote nice things. I took the concept back to Britain and tried it there, too. Distributors, retailers, publishing rivals—everyone was supportive and applauded this new concept. Everyone except the bloody customers, that is. And every issue sold worse than the last. A very great retailer once said: “There is no victory over customers. ” Oh boy, did he get that right. But I was convinced that if only people would sample Blender they would become addicted. Who was I kidding? Did I quit at 3 million loss? No. Only when I had lost over $5 million did I come to my senses. Five million dollars was a lot of chump change for an individual entrepreneur back in the 1990s. Come to think of it, it still is. Blender wasn’t even a part of my core publishing business. That meant I was investing money personally. My five million had come from after-tax dollars! Just how dumb can one guy be? I had forgotten John Dryden’s advice. Errors, like straws, upon the surface flow; He who would search for pearls must dive below. I had forgotten to “dive below.” I was in awe at the pretty patterns the straw made on the surface. And because I would not give in, my stubbornness turned into a jujitsu master and slammed me to the mat again and again.
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,
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Why did I continue to reinforce failure, week after week, month after month, year after year? It’s a question I have often asked myself— with no satisfactory answer. The best I can give you is that I came to believe too much in the concept of a regularly published CD-ROM disc and was seduced by the technology. In addition, the Blender staff, headed by David Cherry and Jason Pearson, were a great group of people, hard-working, talented, innovative, and fun to be around. In short, I fell in love with the project. I did not listen to my financial advisors or my long-time partners in other companies. I just stuck in there and got myself killed for my pains.
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“Success is never permanent; failure is never fatal. The only thing that really counts is to never, never, never give up.” That’s that old windbag Winston Churchill again
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Once you begin to believe that you are infallible, that success will automatically lead to more success, and that you have “got it made,” reality will be sure to give you a rude wake-up call. Believing your own bullshit is always a perilous activity, but never more fatal than for the owner of a start-up venture.
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By acting small, I mean remaining in touch. Remaining flexible. Constantly examining how your company could do better. Keeping a sense of proportion and humility. Not throwing your weight around playing the great “I Am.” Remembering that much of your success so far has been achieved by dumb luck.
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Acting small in the early days of your business sets an example to those around you. If staff see you indulging in long lunch hours and purchasing yourself a fancy company car, then they are either going to resent it or they are going to emulate you. This is not a good thing. You can do all that stuff later, when you’ve made your first fifty million.
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Most of the worst errors I have made in my life came from forgetting to act small. It’s hard to do when you’re rolling around in coin and everything is going your way. But acting big leads to complacency, and complacency is the reason that many successful start-ups falter.
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You have to be willing to listen and to learn and to emulate success elsewhere. If you don’t, if you think you have already made the cut, if you’re thinking “game over: time to party,” then bad stuff begins to happen very quickly.
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you are determined to be rich, there is only one talent you require. Can you think what it is before your eyes skim down to the next paragraph? Right. You need the talent to identify, hire and nurture others with talent. “There is no substitute for talent. Industry and all the virtues are of no avail,” wrote the novelist Aldous Huxley
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Any company managed and run by plodders and jobsworths will be lucky to survive, let alone prosper. Talent is the key to sustained growth, and growth is the key to early wealth. You have to identify and hire talent. You can’t skimp on it.
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Sometimes, to ensure that a talented individual will work for you, or will stay working with you, you need to be flexible. Money is not always the great motivator here. Talented people want a good salary, of course, but surprisingly often they are more attracted to new opportunities and challenges.
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A few years later he won an industry award as “most valued young CEO in media” or some such nonsense. More important, he built Dennis Publishing, Inc. for me brick by brick. And built his own reputation in the process. When you come across real talent, it is sometimes worth allowing them to create the structure in which they choose to labor. In nine cases out of ten, by inviting them to take responsibility and control for a new venture, you will motivate them to do great things
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Talent is usually conscious of its own value. But the currency of that value is not necessarily a million-dollar salary. The opportunity to prove themselves, and sometimes the chance to run the show on a day-to-day basis, will often do the trick just as well. This holds true even if talent is placed in the driver’s seat of a small division within an existing operation. What talent seeks, as often as not, is the chance to prove itself and the opportunity to excel.
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My advice on this subject was contained in the second paragraph of this section. You must identify talent. Then you must move heaven and earth to hire it. You must nurture it, reward it properly and protect it from being poached. If necessary, dream up a new project. Better still, get the talent to dream it up.
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Youth is a further factor. By the time talent is in its mid-to-late forties or early fifties, it will have become very, very expensive. Young talent can be found and underpaid for a short while, providing the work is challenging enough. Then it will be paid at the market rate. Finally, it will reach a stage where it is being paid based on past reputation alone. That is when you must part company with it.
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Anybody wishing to become rich cannot do so without talent. Either their own, or far more likely, on the back of the talent of others. Talent is indispensable, although it is always replaceable. Just remember the simple rules concerning talent: identify it, hire it, nurture it, reward it, protect it. And, when the time comes, fire it. If you can do all these things with talent in the context of building your own company, I would be truly astonished if you did not become rich. Because the truth is, talent does most of the work for you. Just as it has done since the beginning of recorded history.
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After all, who built the pyramids? The pharaohs or the engineers? Think about it. Then go hire some talent—just like they did.
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In this chapter, I intend to deal with the cardinal virtues of getting rich. I intend, too, to deal with some common misconceptions that have cropped up on those occasions when people have taxed me about how a guy like me (to misquote John Lennon) got richer than they did. One thing is certain, it has little to do with merit or fairness
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You will find in the pages of most self-improvement books by quacks (defined as those who have never done it themselves but feel justified in pontificating about it), a great deal of drivel concerning the importance of persistence. In such books, this word is usually spelled with a capital “P” and is treated as an object of idolatry and reverence. Fortunately, this is not a “self-improvement” book. I do not believe anyone can be “improved” by buying and reading a book. They can only be “improved,” if that is the word, by their own actions.
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If anything, How to Get Rich is something ever-so-slightly new in the world, or at least I have tried to make it so. It is an “anti-self-improvement” book—because it admits openly that the chances of anyone reading it and then becoming rich are minuscule. The vast majority of you are far too nice. And comfortable. And sensible
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My book points out, in harsh detail, the damage to your present contentment and the risk to future and existing relationships that you run by seeking to get rich. It also deals with the coarsening of your nature that will accompany the rough and tumble of acquiring a piece of the pie from another’s table. It points out, too, that avarice is tremendously time-consuming and that time is in somewhat short supply—our lives are way too short
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To return to our subject, persistence is important, no doubt about it, and requires a concerted effort of will and stamina to maintain. But it is not an end in itself. Persistence spelled with a capital “P” (except at the beginning of a sentence) represents the same old error that one discovers in nearly all “self-improvement” books, not to mention in the men and women who write them.
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“Never give in” is a useful catchphrase. But don’t take it too literally. We must all surrender at some time, to love or desire or death. You will be forced into the last of these, and a fool if you never surrender to the first. But never give in easily.
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“Persistence” is a vital attribute for those who wish to become rich, or who wish to achieve anything worthwhile for that matter. As is the ability to acknowledge that one has made a mistake and that a new plan of action must now be made. Any such acknowledgement is not a weakness, it is a sign of clear thinking. In its way, it is a kind of persistence in itself. Try, try, try again, does not mean doing what has already failed, over and over again
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Stubbornness is not persistence. Stubbornness implies you intend to persist despite plentiful evidence that you should not. A stubborn person fears to be shown he or she is wrong. A persistent person is convinced that he or she has been right all along, and that the proof lies just around the corner. That with just a little further effort, the veil of failure will be torn away to reveal success. And the difference is…?
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Quitting is not dishonorable. Quitting when you believe you can still succeed is. You must keep the faith. Belief in yourself and faith in your project can move mountains. But not if you insist on trying to scale the mountain by an impossible route which has already failed.
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The damn thing was just not right. I was on the wrong track and found it difficult even to articulate what was wrong. Wrong it was. But why? An associate who had worked with me for some years, Susan Freeman, made the crucial observation. She was neither a designer nor particularly knowledgeable about computers. But she had a keen eye and was involved in the project up to her neck. “It looks rather like a magazine,” she said. “It doesn’t look like a catalogue. That can’t be right.” Of course! I had been urging my team, subconsciously, to create yet another magazine. But mail-order catalogues do not have “readers. ” They have potential buyers of goods. We had fallen into the trap of doing what we were trained to do.
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We were in such a rush that, instead of starting out with a blank sheet, we had moved onto automatic pilot. Every person on the team was a magazine professional of some kind. Dumb, dumb, dumb.
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Do not be afraid to change tack, alter course or make new plans with whatever you are attempting to achieve. Especially if you sense that you are on the wrong track.
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Above all, avoid banging your head against the same piece of wall. The wall will not get any softer. And don’t give up—if you want to be rich.
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Persistence is not quite as important as self-belief. I have known people who believed in themselves, who acted on that belief, got lucky quickly and got rich. Persistence merely offers a second or third bite at the cherry. Your belief in yourself brought you to the cherry bowl in the first place.
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Self-belief is a priceless asset. As Eleanor Roosevelt once remarked: “No one can make you feel inferior without your consent.”
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We may detest arrogance, yet isn’t it true that we admire it a little, too? Even though arrogance is a poor, shabby thing compared with rooted self-belief. It is an imitation of the real thing.
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Single-handedly, individuals with ingrained self-belief (and, usually, a dollop of arrogance) have changed the destiny of nations. We have had one such in the past century in England. Perhaps he was a warmonger. Perhaps he was an incompetent strategist and a jingoist and an empire builder and a silly old buffoon, especially about the rights of women. But Winston Churchill’s sense of his own destiny—his unshakable self-belief—was, for a while, all that Britain contained in its arsenal after Dunkirk.
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to read Winston Churchill’s speeches today, and, better still, to hear his recordings of them, is to understand the astonishing power and mesmeric quality of self-belief.
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For just one moment, a democratic people were saved from fear of failure, and from the fear of fear itself; from the shame of capitulation to evil—by what? By one old man’s belief in his own destiny, by his insane, unprincipled self-belief, and the belief in the destiny of his country and of freedom in Western Europe. I am not asking you to be Winston Churchill. None of us could be, or would necessarily want to be. He was a child of his time. But I do ask that you begin, right now, right at this very moment, to ask yourself whether you believe in yourself.
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Truly. Do you believe in yourself? Do you? If you do not, and, worse still, if you believe you never can believe, then by all means go on reading this book. But take it from me, your only chance of getting rich will come from the lottery or inheritance. If you will not believe in yourself, then why should anyone else?
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Without self-belief nothing can be accomplished. With it, nothing is impossible. It is as brutal and as black and white as that. If you take no other memory from this book, then take that single thought. It was worth a damn sight more than the price you paid for it.
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Which does not mean that you should trample on doubt. Doubts are like pain. If pain was to be eliminated from humankind, how would we receive warning that something was happening to our body requiring urgent attention? In many situations, pain must be ameliorated— during surgical operations, recovery from serious injury or in the throes of dying, for instance. But to eliminate pain entirely from our lives would not be a sensible objective or in our best interests. Doubt, too, is a warning system and plays its part in reaching decisions. An important part. Without doubt, as was the case with Hitler’s Youth Brigades, there is only naked ego and the kind of certainty that leads to untrammeled arrogance, and worse. Sometimes far, far worse. There is nothing wrong with doubt, or with fear. They are immensely useful tools. But you either learn to incorporate them into your thinking and your life, or you will be ruled by them. There is no “middle way.”
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It is doubt multiplied by the fear of failure, unconfronted, which leads to the creation of a vicious cycle where self-belief is eroded and nothing is achieved. Doubts can and should be confronted, as should fear. This is best done in daylight, under rigorous examination. (Three o’clock in the morning is a difficult time to confront any such messengers.) Write down your doubts and fears. Examine them. Hold them up to the light. Suck the wisdom out of them and discard their husks in the trash.
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Are there things that can be done to bolster self-belief? I believe there are, but they are mostly beyond the remit of this little book. This book deals only with the getting of wealth. I will leave you with two thoughts on the subject. Firstly, if you have ever escaped from very serious trouble indeed, or have been at the point of death, then you will know that one of two things happens. Either you become cautious to an absurd degree, or you are liberated from many ordinary fears. With liberation comes the knowledge that nothing is really very important in the lives of men; nothing is as terrifying as the fear itself. And from that, paradoxically, comes self-belief—a belief that anything is possible.
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This business of piling up wealth is an easy business. Easy, that is, compared with giving birth, or raising children, or pressing on a parent’s doorbell at midnight to tell them their child has died in an accident. Or nursing children you know will never grow to adulthood, or pulling rocks on rollers under the lash of brutal overseers to build a monument to a deranged pharaoh. How easy do they sound?
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If you want to be rich you must work for it. But you must believe in it, too. You must believe in yourself, if only to armor yourself against the laughter of the gods in your quest. Your mad quest to be rich.
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The truth is that nobody else offered to invest big money in The Week because nobody else believed it could ever work financially. Not as a major title, anyway. My board of directors at Dennis Publishing certainly didn’t. They were dead against my investing in such a weekly. Weeklies eat up cash, especially weeklies with debts, no advertising, a pitiful number of subscribers, no newsstand sales and a bundle of small investors. Voices were raised in that boardroom. Loud voices. What I hadn’t the courage to tell my fellow directors at that meeting, or, for a day or two, even my financial guru, Ian Leggett, was that I had already invested. I loved the concept. I was going to own a piece of The Week. And to hell with naysayers. That’s easy to say. But it’s not good business. It’s rude and arrogant to invest in a company you intend to bring into your stable without a thorough and honest discussion of the pros and cons with senior colleagues. Like I said, it’s not good business. But it is the only business an entrepreneur has any right to be doing. I am not a manager. I am not even a businessman. I’m an entrepreneur and I go with my gut. After that, managers and bean-counters and financial advisors take over. But only afterward. I had the money and I had the “feeling.” The “feeling” is when the hair rises slightly on the back of your arms and neck and you know you are on the scent of something you shouldn’t be doing— but you’re going to do anyway. It’s called commercial instinct. You develop it over the years. You certainly aren’t born with it. I had it with The Week. Watching an experienced entrepreneur come into contact with a potential pot of money is like watching a prone lioness raise her nose and sniff. She cuffs her cubs away. Then she sniffs some more. Then she rises and pads away to hunt. Alone. She can’t see it. She can’t hear it. But she can scent it. She knows prey is close. It means food. Prey is her business. It’s mine, too. So I invested heavily in The Week. It lost money. What did you expect? Ian Leggett was desperately concerned that I had bitten off more than I could chew. He had a right to be concerned. I asked some talented people to help out from Dennis Publishing, careful myself not to interfere with the creation of the editorial product. They already had that right. It did not need messing with. The Week promptly lost more money, so I bought out all of the minority investors, except for Jolyon Connell, the founder, and the editor, Jeremy O’Grady. Slowly, almost imperceptibly, The Week began to take off. I remember the thrill one evening when I heard a person I did not know at a dinner party quote straight out of my magazine. Even more unbelievably, readers began to proselytize. No, I mean it. Not just express satisfaction, but proselytize like religious fundamentalists. Like true believers. In thirty years of publishing, I had never seen anything like it.
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Trust your instincts. Do not be a slave to them, but when your instincts are screaming, Go! Go! Go! then it’s time for you to decide whether you really want to be rich or not. You cannot do this in a deliberate, considered manner. You can’t get rich painting by numbers. You can only do it by becoming a predator, by waiting patiently, by remaining alert and constantly sniffing the air and by bringing massive, murderous force to bear upon your prey when you pounce. You can share the kill later, by all means. But if you want to get rich, trust your own judgment when it calls—and leave those whose job it is to manage your business to pick up the pieces. They can have the scraggy bits. But the heart and liver are yours.
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The Chock full o’Nuts story contains another germ of truth, too. By concentrating on selling coffee, its founder presumably ran down his shelled-nuts business. If you want to buy shelled nuts (why?) today in New York City, you don’t automatically think of Chock full o’Nuts. Strangling your own baby, in order to grow, is far more common than you might think. If you have a successful monthly magazine, for instance, and then launch a weekly in the same category, you will inevitably weaken sales of your original title. This will follow as surely as night follows day. So should you launch the weekly magazine? Yes! A thousand times yes! Why? Because if you do not launch the weekly edition, even though you know it is a good idea, then your rivals will do it for you. You will then be left with a damaged monthly and no weekly. This is called the “Barbarians at the Gate” principle.
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Let’s imagine you have a herd of sacred cows inside a fortress. The barbarians are at the gate and you are under siege. Killing sacred cows is a horrible crime, even though your defenders are running short of food. If the barbarians overrun the fortress, the sacred cows will die anyway. If you kill some of the cows, you will be stronger and possibly able to turn back the barbarian attack. Ergo, you eat one or two sacred cows—even if those same cows were the meaning of life last week. Learning to evolve or die is a cardinal virtue.
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This same argument has been used for centuries, both in commerce and in politics. Recently, the growth of the Internet has begun to destroy the music industry. More and more people download songs without paying for them, despite it’s being illegal. As a result, CD sales have been in a tailspin and record companies have watched in horror as billions of dollars have been sucked out of the market, crippling their share price. These record companies, who have grown fat for years by charging very high prices for little bits of cheap plastic, reacted foolishly, at first. They were far too slow to begin devouring the sacred cow of the CD. What they wanted was for the pirating and illegal downloading to stop. That’s where they concentrated their efforts. Dumb move. The barbarians were not about to quit anytime soon. After all, what the record companies were faced with was nothing new. It was merely a kind of forced diversification. What they should have been busy doing, since the creation of the Napster website, let alone Apple’s iPod, was weaving themselves new baskets—not defending the old, worn-out basket. Today, as a result of commercial pressure, that is exactly their strategy. Let’s not be too hard on them. As you will discover when you start your own business, it’s difficult and scary facing up to swiftly changing realities on the ground. Most of us would prefer that things stayed the same so that we can carry on making money in the way we have grown comfortable with.
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things do not stay the same. Either you learn to go with the flow and change as rapidly as you are able, or you will be left stranded, like the last dinosaur, by the last warm lake, on the last continent the ice age has yet to reach.
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Let’s take another example of building more baskets just as quickly as you can. Richard Branson has done it. Some of his Virgin enterprises are not as strong as others (did you ever try Virgin Cola?) but that’s not the point. Western capitalism will have to sink into an ocean of darkness before all of Richard’s Virgin businesses go broke. He has built scores of baskets, ranging from financial services to airlines, from music super-stores to railway passenger services. He’s a canny man. I know from experience. I used to wake him up occasionally on his longboat, moored in central London. Before I even got a mouthful of coffee for breakfast, I was answering his damn telephones, ringing off the hook while he showered. In those days, he was probably showering in his trademark jumper. Richard has perfected one cardinal rule: he owns or part-owns more baskets than almost anyone alive. It’s certainly one way to become a billionaire.
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How many baskets should you go for? As many as make sense. In the beginning, it would be best, if you can, to keep them related to your core business. Just like Richard did. He started off importing “gray” record albums from the USA—they were the illegal downloads of their time, except they weren’t free. Richard followed up with record stores and then a record company. Or was it the other way around? No matter. Different apples. But basically all from the same orchard. You will not have to be as exceptional as Richard Branson to get rich. But his policy is a good one. No, a great one. I’ve failed the basket test a few times, and perhaps I should confess to one or two of them.• When I had the chance (i.e., when flush with cash), I should have bought more magazines. Even a newspaper, if I could have afforded it. Local newspapers, until recently, made a ton of money from their classified ads. I missed a trick there.• I should have considered going into radio or television production earlier than I did. Many popular television shows are based loosely on a “magazine” format. There are a lot of similarities in the boys and girls who create television and create magazines. Not to mention the content.• I should have invested in one or two Internet start-ups I knew were going to do well. That was a stupid error and came about because, by then, I was spending too much time each day writing poetry. No excuse, though.
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nobody likes to dwell on past failures. They’re just too painful.
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Dennis Publishing built its websites carefully and well. We stuffed them with content and we advertised them in the pages of our magazines. But we didn’t allow ourselves to be suckered into weaving a basket the size of the Super Bowl which would be obsolescent before it returned a penny.
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This sensible policy was mainly thanks to Guy Sneesby, who still works for me. Despite loving the Internet and everything about it, he was dead against throwing money at it. “Wait until it grows. Match investment with growth. Make it pay,” was his game plan. Turned out he was right. Probably saved me $10 million or so. Maybe more. Thanks, Guy. (You see, it pays to hire talent smarter than you are.)
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Just remember that this advice is not designed for your start-up phase. During the start-up, you concentrate on that one basket as if your life (and the life of your firstborn) depends upon it. But once you have something that’s working and making some money, start looking around quickly for another opportunity. The more baskets the better.
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Diversifying not only ensured that I had more chances to lay more eggs and somewhere to incubate them, it also gave me the confidence to concentrate on any one egg at any one time. When one of my projects was in trouble and needed more work, or needed rethinking, the fact that I had other eggs in other baskets gave me the confidence to do what was right. Like reengineering or folding it.
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One of the problems with being a start-up entrepreneur is that you tend to think of what you have created as some kind of surrogate child. It becomes your “baby,” if you’re not careful. This is dangerous and counterproductive. You are not in the egg-laying and basket-weaving or baby business. You are in the business of getting rich.
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If you have only one set of eggs in one basket, then selling it (let alone folding it), can be surprisingly hard. The thought of letting go because it’s just not working may be more than you can bear, however logical such a decision is
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By having other eggs doing well in other baskets, you ensure that you can approach such problems at least semi-dispassionately. (It will only be “semi”; trust me.)
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The reverse of that medal, of course, is that I do not bring to any project the passion and insight of those more closely involved.
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by diversifying and building other baskets in other countries, I believe I have become better able to make hard decisions more often. That’s a definite plus.
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I want to be where people can reach me on certain days of the week. Why? Because I want to hear what they have to say. That’s not because I’m a sociable chap. In fact, there’s little I like better than my own company. But when you stop listening, you stop learning.
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Listening is the most powerful weapon after self-belief and persistence you can bring into play as an entrepreneur
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Talking to your own executives and senior managers is necessary, of course. But talking to people you do not know, or who work in some obscure corner of your industry (or even in your own company) , is just as necessary. More so, perhaps.
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Courtesy is not a cardinal virtue in getting rich, I admit. But it helps. It works. It greases wheels where force will not prevail. Out of the mouth of anyone on their way to becoming rich, it lends a certain gravitas and creates the impression of someone you might like to do business with. This is true in any country in the world, in my experience, but it is especially true in the USA. Americans worship courtesy almost as much as they worship money.
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business is not a talking shop. It relies on decisions, often hard decisions, being made in as short a time as makes sense.
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My advice, based on thousands of such meetings over the years, is to keep them short—unless your gut tells you that you have stumbled upon a winner. Set the meeting for twenty minutes. Have somebody interrupt you after twenty-five minutes and usher the caller swiftly from your room.
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It’s usually better to leave no doubt in your visitor’s mind if you’re not interested in their project or idea. In a way, it’s kinder, as well. While the temptation is to say, “I’ll confer with my colleagues and get back to you,” this will eventually come back to haunt you and waste more of your most valuable resource. Time.
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I’m feeble at this balance between courtesy and efficiency and always have been, but I’ve gotten a little better over the years— especially with the help of my personal assistants, Wendy, Caroline and Ashleigh. They’re trained to interrupt me if they sense either my visitor or I am flying on autopilot. And they can be ruthless about it!
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Piling up meeting upon meeting in a brutal schedule actually helps. Your visitor sees others waiting to see you and will procrastinate less. If you do need time to mull over a suggestion, then make it clear that it will be you getting back to them. People with an idea are desperate, and will call and call and call unless you set clear ground rules.
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Now let’s talk about ideas and who owns what. If someone comes to see you with an idea you’re already considering or are already working on (no matter how loose the connection), then stop them abruptly and tell them the situation. That’s only fair. It is curiously common for new ideas to arrive independently from more than one source at a time. Science can’t explain it, and neither can I, but it’s a fact, all the same.
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Ideas, by the way, cannot be “owned” by anyone. You cannot trademark or patent or copyright any idea. You can only protect the execution of the idea and trademark the name
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This is an important thing to know in any business and is often misunderstood by people who come to you with an idea. Such people often request you sign an NDA (a Non-Disclosure Agreement), and I am usually happy to do so. Why? Because the force in law of most NDAs is limited and they do not work in the way most people think they do.
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For example, the idea for 3M’s Post-it Note could be described as follows: “Paper of any size, one edge of which will attach itself by way of gum to most surfaces, especially paper, and which can be detached, without leaving a residue or mark.”
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If you had tried taking that description to the patent office after 3M’s research scientist, Dr. Spencer Silver, discovered the adhesive but before Art Fry, a 3M new-product researcher, hit upon a use for it—it would have availed you nothing. Why? Because 3M owned the formula for the gum. The formula was a way of executing the idea. If you had come up with an even better gum and had created your own name for such notes and marketed them, then 3M would have had a devil of a job to stop you, because no one can copyright or patent an idea. You can only protect the execution of the idea, which must be unique. If your gum really was unique, you would be in business. And what a business!
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. If you are in the business of executing ideas to make money, then this is something you are going to have to come to grips with and become a minor expert on. There are many books to help you out there.
Note
Business of intellectual property
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what about ideas put forward by a member of your own staff? What if they come up with an idea which the company then develops and which proves to be a huge success. Who owns it? The answer is that the company does. You do, if you are the owner of the company and your employee put forward the idea in the course of working for you. (Now do you see why you must always hire people more talented than you?)
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This seems unfair. It was her idea. She pushed it forward and probably worked very hard on it. Shouldn’t she enjoy some of the financial benefits of her idea? We’ll get back to that
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but first let’s look at another scenario. The non-employee who comes in with a thumping great idea and wants you and your company to help execute it. This is a different kettle of fish. You must proceed cautiously. Just because NDA agreements usually have little force, doesn’t mean you can be cavalier and reckless. How far has this person gone toward executing the idea? If she came to see you and said, “I have an idea for a colored note that can be stuck onto paper, that you can write on, and that can be removed later without leaving a mark,” then she is a fool. She should not have come to you without protecting that idea very, very carefully indeed. However, if she then brought out a sample that did not work very well, but which worked to some degree, the case is altered. She has executed her idea, however badly. If you wish to invest in the idea, you would almost certainly have to come to a legal agreement with the inventor.
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This all sounds hypothetical and theoretical. But it’s not, you know. In more situations than you might imagine, it becomes critical. Ownership is all. When who owns what is in dispute, the only people who are going to get rich are the lawyers. There have been many, many bitterly contested ownership disputes in business which not only wrecked the companies involved, but destroyed the sanity of the main participants
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what of the young lady who works for your company and brought you (or her manager), the great idea that worked so well? What of her? That’s up to you, buddy. You’re the owner. If you’re a sensible, decent, worthwhile human being, you will reward her handsomely and promote her. And you will thank her publicly. If you’re a rotten, ingrate scumbag, without any decent feelings whatever, you will not reward her. And you’ll get rich. But perhaps not quite as rich as a more enlightened owner. Because if your clever employee has had one such great idea, she may well have another later. And she is unlikely to stay working for a company that stiffed her so badly, or to hand them another gem, isn’t she?
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I’m fully aware that this isn’t a book about becoming a worthwhile human being. As I keep attempting to drum into you, riches aren’t particularly worthwhile in themselves in any case. They don’t make anyone a better person, at least as far as I have seen
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But listening continuously, listening and learning, is one of the vital components for those of you who wish to be rich. What you choose to do with your loot is up to you. But listen and learn if you want to be rich!
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Army chaplains who have seen bullets fly, sometimes boast that “there are no atheists in the foxholes.” In the same way, as bullets fly around our head in life, most of us are believers in luck. Secret believers for the most part, it’s true. But believers nonetheless.
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The major religions of the world have worked tirelessly over the centuries to eradicate “superstitions” among their flock; “superstitions” which appear to mock, or at least to be at odds with, “holy” writ. Which is another word for supernatural dogma. In this, they are at one (just for once) with philosophers and scientists, although for very different reasons
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And I have witnessed genuine achievement and hard work undone by a series of astonishingly unlikely events—mostly in others, I hasten to add
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That disease was also double luck disguised for me. It forced me to change my way of life. I came so very close to death that it jolted me back to reality
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Seneca, coined the following: “Luck is what happens when preparation meets opportunity.” I have never come across a better definition
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Preparation is the key. Be prepared. Do the heavy lifting and the homework in advance. Get on with the job, but remain alert enough to spot an opportunity when it arrives. Then hammer it. If you haven’t prepared yourself, the opportunity will go begging. It will be yet another regret in your life, another “if only …” And even if you have prepared, but are too busy, probably buried in the minutiae of management, or a messy divorce, or moving house, or a hundred and one other things, then luck will again evade you. Months or years later you will be saying, “If only I had spotted that opportunity. I was ready for it, but I wasn’t paying attention.” “If only…” are the two saddest words in the English language.
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The only truth about luck, good or bad, is that it will change. The law of averages virtually guarantees it. And here, I think, is one difference that separates me from my “unlucky” friend, whom I shall call Albert. Albert is so close to the cross currents of the market that his antennae lead him astray. When he hits yet another bump on the road, or has a head-on collision, he attempts to change his luck by changing direction. It’s not that he lacks stamina. Albert has tons of energy and stamina. But he doesn’t, as Churchill put it, “keep going.”
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This “flight not fight” behavioral trait is the sign of a prey animal, not a predator. Despite what you will read in many self-improvement tomes, “partnering” and “symbiotic evolution” are no way to get rich. They may be a way to a better world. They may make you a happier person and a better manager. But they will not make you rich— except, perhaps, in spirit.
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To become rich you must behave as a predator. I will go further, you must become a predator. Albert is not a predator.
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Albert is more intelligent than I am. He had a grand education and read all the right books at university. He is not a self-taught scholar, as I am. But there is a downside to all this intelligence and imagination. He thinks a little too much before he acts. He weighs the options too carefully. He is capable of imagining defeat. So while he is clever enough to want to minimize his risk by switching to yet another new and uncontested marketplace, he leads himself into uncertainty. And into error.
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Nature abhors a vacuum and if no one else is contesting a market, it may well be that no such market exists.
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Very few visionaries get rich
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New software often faces this problem. Brilliant software designers come up with fancy software that solves no known problem. They are forced to discover or invent a problem their software might solve. Should they fail, there will be no users and no investors. And no money. Take electronic spreadsheets, for example, today one of the most ubiquitous tools
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few visions or new technologies result in such a serendipitous outcome. Yet Albert wastes too much of his time seeking them out, coming to understand them and making all the rest of us feel inferior as he wearily explains this exciting new concept for the umpteenth time to Luddite chumps like me.
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There are other differences between Albert and me. He is a great believer in partnering and share options and employee profit participation. I shall be devoting an entire chapter to this subject (See Chapter 14: A Piece of the Pie), but I will mention, here, that in Albert’s case, this division of the spoils is undertaken in the minutest detail, long before there are any profits whatever to share. Albert believes they encourage his coworkers. But such arrangements are immensely time-consuming and a distraction from the tunnel vision necessary to become rich in the first place.
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he is a perfectionist and his powers of delegation are stunted. He’s so good at what he does that he is unwilling to accept even slightly second-best. This means, for him, that he must do it himself. And if by chance he doesn’t get it exactly right the first time, then he will do it over and over again until it is right. Until it is perfect. We shall come to the importance of delegation later in this book (See Chapter 13: The Joys of Delegation), but Albert’s reluctance to permit young managers to make their own mistakes has cost him dearly over the years. Not just in the time wasted, but in management turnover.
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While he is fair, and sometimes more than fair, with his staff, they don’t love him. They don’t love him because they do not get the chance to grow, and if there is one good thing about a well-managed company in a capitalist society, it is the opportunity to groom talent and encourage it to grow.
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Also, Albert cares too much (because he is growing desperate in his mid-fifties), and takes himself and his destiny too seriously. I know this because I have got drunk with him a few times—always a good way to really get to know somebody. In vain I have pointed out to him that we are nothing but merchant princes. Who will give a hoot whether we made 500 million in a hundred years from now? Nobody will.
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Having too much money isn’t important. Breaking your neck is important. Getting cancer is important. Having nothing to eat is important. Losing someone you love is important. But too much money is absolutely not important, it’s just a part of the game. As H. L. Mencken put it: “The chief value of money lies in the fact that one lives in a world in which it is overestimated.”
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If we lived in a world where seaweed was overestimated, I would collect tons and tons of it. And I would enjoy doing it. But I wouldn’t kid myself it was all that important. It’s just seaweed
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Lastly, Albert has a penchant, and always did, for calling himself unlucky. He’s subtle in the way he does it, but he does it nonetheless. And he does it too often for my taste. You do not have to read Norman Vincent Peale’s The Power of Positive Thinking to know that if you repeat something negative often enough, then you are training yourself in the ways of negativity.
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The mask of misfortune Albert so ironically dons for the amusement of those around him fits rather too well these days. He is becoming the mask. It’s a dangerous, stupid game and he ought to know better.
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You asked me to show you how to get rich. So here are my last thoughts on this vexing and baffling phenomenon. • Prepare yourself for luck, but don’t seek her out. Let her come to you.• Make your own luck • Don’t whine or ever describe yourself as “unlucky.” (You’re alive, aren’t you?)• Be bold. Be brave. Don’t thank your lucky stars. The stars can’t hear you.• Stay the course. Stop looking for the green grass over the hill.• Don’t try to do it all yourself. Delegate and teach others to delegate.• Remember that most predators are lucky most of their lives, unlike their prey.• Whiners and cowards die a hundred times a day. Be a hero to yourself.• If being a hero isn’t your style, then fake it. Reality will catch up eventually.• Just do it. It is much easier to apologize than to obtain permission.• Never take the quest for wealth seriously. It’s just a game, chum.• Next time you bump into Lady Luck, giver her a whack on the rump from me.• Be lucky. Get rich. Then give it all away. (We’ll get to that bit later.)
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Serious negotiations, however, have everything to do with getting rich. This is both because a great negotiator can make a real difference in some situations and because many people, astonishingly, believe themselves to be great negotiators. In my experience, the reality is somewhat more prosaic:• Most of us are rather poor negotiators.• Most negotiations are unnecessary.• “The other side” is often just as smart (or stupid) as you are.• In the end, “the balance of weakness” almost always decides the issue.• In Greed vs. Need, the former usually “wins.”
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Take a small example. You have an employee who wishes to deposit and collect their child from school each day. This will supposedly interfere with his or her “normal” working hours. Big deal. If the employee is important to you, you will probably bend over backward to “negotiate” a solution. If they are not, you will probably enforce the letter of the law applicable in the country or state in which you work, or muddle through with your company’s “in-house rules.” (Personally, I’d allow them to do it. But that’s because I’m both an idle manager and a big old softy—in personnel matters, at least.)
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Serious negotiations are like falling in love. You may have fooled around a few times and been strongly attracted to one or two lovers. But when you fall in love, brothers and sisters, you will know all about it. Right off the bat. Boom! That’s what serious negotiations are like. It’s probably happened once or twice, right?
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Do not mistake serious negotiations with management bargaining. They require very different skills.
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All great companies, all well-run organisations, need great managers and great staff. That much, at least, is pretty obvious. You forget it at your peril.
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all organizations are a reflection of the people who start them. This sounds crazy, but history has shown it to be true. The effects of even long-dead founders often linger for decades. I’m told by Hollywood film buffs, for example, that MGM movies in the old days were normally slightly less “dark” than Warner Bros movies. It was the “house style,” a style that had filtered down from the original founders over the years and somehow pervaded individual directors, producers and even actors at each studio.
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The only “style” I assume you’re interested in developing is an efficient money-making machine which is also a great place to work. That’s a wise and laudable aim, but however necessary
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Personally, I don’t think I was a very good managing director or CEO of any of my companies, so my advice concerning your choice of middle management is limited to the following: the world is full of aspiring lieutenants. Most people seek job security, job satisfaction and power over others far more than they seek wealth. And thank goodness for that. If all the great managers in the world were dead set on becoming rich, and willing to take the necessary risks to do so, there would be little hope for the likes of you and me.
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Please remember: you are not reading this book to become a successful manager. Managers rarely become rich. Most managers are lieutenants. You, on the other hand, have to keep your eye on another ball—several other balls, in fact.
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You may well have to masquerade as a manager (for a short while) on the way to becoming rich, and you should strive to be a good manager while the role is forced upon you. But even if you discover that you truly have a talent for the minutiae that management demands, it’s best to abandon the role just as soon as you can afford to hire appropriate personnel.
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Management efficiency really does count, of course: loyalty counts, fairness counts, a steady disposition counts, a sense of appropriate compromise counts. An organization will fail without managers who apply such virtues consistently. But they are not necessarily attributes you should invite into the room during a series of tough negotiations when the big money is on the table and your future is on the line. They are the attributes of first-class managers. Not negotiators.
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Serious negotiations are very different from day-to-day bargaining and should be approached differently. They imply a weakness in the position of at least one of the parties involved in the negotiations
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first thing to be done, perhaps the most vital thing, is to establish exactly where those weaknesses lie. Weaknesses in serious negotiations usually exist in both camps, of course, at least to some degree or another, and it becomes important to swiftly determine which weakness is most pressing and most potentially catastrophic to which party.
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An immediate balance of weaknesses may well prove more decisive than any long-term balance of strengths. It is for this reason that small companies and individuals have sometimes managed to outnegotiate larger rivals, especially in emerging markets and technologies. If a big, powerful organization convinces itself it absolutely has to have some whizzo new technology, or whatever, it will sometimes permit itself to pay way over the odds for it
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The balance of weakness is also the reason why farmers in Britain, for example, are utterly in thrall to the power of the supermarket chains and why British people pay more for much of their food than almost anywhere else in Europe. British food isn’t better (in fact, it is somewhat worse than, for example, French food), but British supermarkets are undisputed champions when it comes to exploiting the balance of weakness. Farmers are poor negotiators. Supermarket chains are great negotiators. Supermarkets have a lot of cash and many possible sources of supply. Farmers need to fix that broken tractor and pay their veterinary bills right now. The balance of weakness is overwhelmingly in the farmers’ camp and the result is therefore preordained unless central government interferes.
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Supermarkets have a slight weakness—very slight. They need to buy food regularly and in wholesale quantities. And they need quality and consistency. If food became scarce, the balance would tilt and farmers would begin to clobber the supermarkets. But, right now, farmers haven’t a prayer. There is too much food of reasonable quality too consistently available from too many sources and our government has chosen not to interfere.
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take the attitude of banks toward start-up or small companies. If you need a loan because you cannot meet payroll, you almost certainly won’t get one.
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The balance of weakness is so obvious and utterly immediate, nobody will want to waste time listening to your entreaties.
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But if you need a loan, say, because you wish to take a private company public with a reasonable chance of success in the not-too-distant future (in other words, you don’t really need a loan, it would merely be convenient to be offered one), then loans will shower upon you like confetti. After all, banks need to make money by selling professional services as well as charging interest, and you are now a potentially important customer, a customer who may well require those professional services—not a supplicant groveling on his knees with a dog-eared business plan.
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But never forget why he came calling in the first place. He does not love you. He is not your friend, although he may pretend to be. He might not hate you, he may even admire you a little. He will certainly flatter you. But remember he had to come. His fear drove him. His fear of his master, the institutional investor.
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The elephant is concerned that his master may hear of this little flea’s idea and that he might well be punished for not having thought of it himself. (Most elephants are a trifle lazy, you know.) The elephant knows what he must do then. He lumbers over to meet you. He has done it many times before, with many other fleas.
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the elephant has a master, a mahout.
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He is otherwise known as an institutional investor.
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An institutional investor, often a pension or savings company, is just jargon for an entity that owns a big chunk of stock in a publicly traded company.
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If all this sounds to you as if the controllers of capital are the ten-ton elephants in the jungle, then you’re right. But there is another side to it.
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And the day when he does come—hurrah!—the day when he makes that hateful call—hateful to him, that is—that is the day when the fun begins and when serious negotiating skills and a dispassionate understanding of the balance of weaknesses in your particular patch of jungle, at that particular time, can change your life overnight. And can change it for ever. Just as it changed mine.
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Dennis Publishing Ltd. is just such a small specialist magazine publishing company, with a turnover of a few million pounds in Britain and a slippery toehold in the USA. Its finances are precarious. Its owner is a greedy little flea, determined never to be sent back to prison and never to report to another human being in his life. The flea has managed to acquire a controlling interest in Europe’s first personal computer magazine from the man who launched it, Angelo Zgorelec. The magazine is called Personal Computer World, or PCW for short. It is not exactly a big magazine. Angelo and the flea have also helped to build up a series of exhibitions allowing hardware and software manufacturers to show off their latest products. All this helps to boost sales and credibility for PCW.
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Above all, the flea and his magazine are swimming with the tide, not against it. PCW is growing with the market. More readers come on board every issue. And more advertising begins to arrive. A lot more advertising. Angelo Zgorelec and the flea are both immensely proud of themselves.
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the flea is still a greedy little mite and wishes to become a millionaire at the earliest opportunity.
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David and the flea arm-wrestle over the possible sale of PCW to EMAP. The flea speaks to tax advisors, to Angelo and to lawyers. He speaks to his white-knight partners in America. The negotiations intensify and the flea realizes that David, while as calm as ever on the outside, is becoming anxious to close the deal swiftly. There is a particular meeting in the flea’s flat in central London. Very, very nearly David persuades the flea that he must sell PCW now; that he must shake hands on a price of $1.8 million or thereabouts. This is an astonishing price for a new magazine. And remember, the flea is very, very greedy. But just as dumb luck saved the flea before, instinct saves him now. Instinct and the advice of the white knights and others
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He asks for more, much to David’s annoyance, and this time, understandably, that annoyance is openly expressed. For a few weeks, the flea wonders if he hasn’t allowed his greed and naïveté to wreck his salvation. Perhaps he has pushed the elephant too far? Certainly there are those around him who hold precisely that view. But what has actually happened is that the EMAP elephant’s managers have been talking to other fleas. They think they can obtain something rather similar to PCW for less than the 1.8 million, not by a long chalk. What follows is the story of how he came to sell it and how much for.
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There is more than one elephant in any jungle. Which is just as well. Fleas stand little chance when there is only one elephant—monopolies and entrepreneurs don’t get along. Soon after the fateful meeting in the flea’s flat with David, another elephant comes to call. This is a Dutch elephant called VNU, with homes all over Europe. It is a massive beast with a lot of experience in all kinds of magazine publishing
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The usual preamble and mating rites take place. The flea is coming to enjoy lunches in fancy restaurants and bottles of good wine— especially when he is not paying for them. But the flea has also learned to shrug off flattery and keep his eye on the balance of weakness. This particular elephant has a huge need, almost a unique need, and the flea is determined to exploit it.
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The flea suspects that big computer installations will always be around. But personal computers, desktop PCs as they will come to be known, are the coming thing. They are a different kettle of fish entirely from mainframes and systems that require men in white coats and machines the size of a small room. The Dutch elephant’s mahout will be especially angry if the old beast misses out on the coming thing, the desktop PC.
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That is his unique weakness. And he is such a big elephant. And his mahout is such a terribly fierce master. Naturally, the flea also has a weakness, one we already know about. He is very short on cash and is greedy. Can the flea survive his cash shortfall and curb his youthful greediness for long enough? Long enough for what, you ask, children? Long enough to make the Dutch elephant become truly, truly desperate. Can he do it? This is the flea’s plan. His professional advisors hate the plan. It is stupid. A flea cannot outwait an elephant! But it can, you know; for a little while it can. And all the time the flea’s magazine is swimming with the tide, growing bigger each issue and increasing its advertising revenues. The flea even licenses an Australian edition of PCW to a young man who strolls into his office while on vacation. (A young man who will subsequently become a millionaire as a result.) All the while the market is growing. And the Dutch elephant’s mahout is not getting any happier.
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The Dutch elephant’s first offer is perfectly reasonable. It is made over lunch by a very nice Dutchman called Francis. “We can offer you $2.6 million,” he says, peering over his spectacles. The flea stares him in the eye and says nothing. “And a little more. Say half a million dollars, which we will hold in reserve and pay to you depending upon the performance of PCW over the next year or so.” This is a handsome offer. Almost twice the EMAP elephant’s offer. But the flea judges that the Dutch elephant is not desperate enough. Very politely he declines and pours himself another glass of delicious wine. Francis, wisely, let’s the matter drop. He is an older man, and a skilled, courteous negotiator. Some weeks later, the Dutch elephant brings along another of his managers. This one is British and his name is Graeme. The flea likes him immediately. But he is careful to mask his likes and dislikes. These managers are not here to be liked or not to be liked. They are here to negotiate and to rob the flea if they can. That is what they are paid for, after all. That is what their mahouts expect.
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A big meeting is held in the Dutch elephant’s palatial offices. The flea has with him only his lawyer, called Michael. Prior to this meeting, the Dutch elephant has tried to send an emissary to talk to Angelo Zgorelec, the minority shareholder in PCW. The flea is angry about that. There can only be one negotiator. Any house divided is a house that will fall. The flea has asked Angelo not to listen to the Dutch elephant’s minions, and Angelo has willingly agreed. The flea masks his anger at the meeting. This is a big day. He knows it will not be the day, for the Dutch elephant is still not desperate enough. But it’s a big day, all the same. The flea has warned his lawyer, Michael, to keep all their business papers close to hand. To be ready for an abrupt and immediate departure. Michael is unhappy about this. He is a canny, considerate man, and he is the flea’s friend. But he is not a negotiator and the flea is his client. He will do what is asked of him. That’s why he is a professional.
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Around the table there are several managers from the Dutch elephant. And maybe a lawyer or an accountant or two, it’s difficult to tell. The meeting begins and a new offer is made. The offer is almost exactly what the flea has guessed it would be: over five million dollars, with a big chunk held “in reserve.” It is a magnificent offer. Absolutely magnificent. Three times what was offered by the EMAP elephant. For a while the flea does not respond. Instead, he talks about how well the magazine is doing, about the Australian edition, about the growth of the exhibitions. He also mentions that he will be launching at least one more personal computer magazine quite soon—one aimed at the personal computer trade itself this time. At companies who sell personal computers and personal computer software. It will be a business-to-business magazine, precisely the type of magazine the Dutch elephant specializes in.
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Eventually, the discussion comes back to the offer. The flea looks Graeme and Francis in the eye. He totally ignores everyone else present. He empties himself mentally and stares straight through them. He convinces himself that he does not care what the outcome of these negotiations will be. He clings to this illusion of emptiness while he negotiates. He doesn’t care if he becomes a millionaire or not. “The price is 7.8 million with only $650,000 held in escrow. In addition, the buyer of Personal Computer World must permit me to launch my new computer magazine to the trade. If I do not hear from you shortly, then my next price will be over ten million dollars. Good afternoon.” We walked out into the Soho sunshine and stopped at a local café. My hands were shaking as I spooned in the sugar. So were Michael’s. “You’re mad, my friend,” he murmured, shaking his head. “Utterly mad. Worse than that, you have been stupid. They will not pay that kind of money. Also, you have walked out on them, you have threatened them and you have made a sudden, unreasonable demand. Are you really planning to launch a PC trade magazine?” “No,” I admitted. “I only just thought of it while I was sitting there. I haven’t got the money to launch anything. You know that.”
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Michael tried one last time to persuade me to do the sensible thing. “Felix, I am your lawyer and your friend. Let me go back and apologize. Two million pounds is an unbelievable sum of money. I don’t know of any new magazine that has ever sold for nearly five million dollars in Britain. Listen to me and let me go back. You don’t have to go yourself.” And I very nearly allowed Michael to do just that. But something held me back. Something I had sensed but could not explain or articulate. Finally, I smiled a little ruefully and patted Michael’s arm: “Michael, their need will outweigh my greed. I am sure of it. Let’s wait and see.” So we waited.
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Before we bring the story to its conclusion, let us pause and reflect on what has happened here.• The flea has established to his own satisfaction the elephant’s urgent need.• The flea has learned to ignore flattery.• The flea has learned that an elephant cannot be your friend in negotiations.• The flea has learned he is not a good negotiator.• The flea has learned to “empty” himself and make himself believe he does not care.• The flea has overcome his lack of skill by setting a price he will not deviate from.• The flea has hardened his heart and has walked away when the price was not met.• The flea has introduced a rogue element (the trade magazine) into the negotiations.• The flea has weighed Greed vs. Need. He believes Need will outweigh Greed.
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Of course, you know the end of the story. We all met again around the big table, this time with a lot more accountants and a lot more lawyers. The price agreed was 650,000. Angelo got his two and a half million dollars. My company got the rest. I got to launch my trade magazine, called MicroScope, which kept me in the loop of a new and growing market but out of VNU’s way—for a while.
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Lastly, and very cleverly, VNU kept me out of the personal computer market (except for my trade magazine) for three years. Three vital years. They did that with a noncompete clause in the sale agreement. (Noncompete clauses can be a bugger for those selling an asset. Keep the period of noncompete as short as you can.)
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A Few Tips on Negotiating • Remember that few of us are any good at detailed negotiations. That includes your opponent, by the way.• If you are a poor negotiator, like me, then set a limit on what you will pay or accept and on any conditions attached. Do not deviate. Your first thought is your best thought.• Most negotiations are unnecessary. Don’t enter into them. Remember that “the fortress that parleys is already half taken.” Save serious negotiations for serious occasions.• Do your homework. And do it rigorously. What you don’t know or haven’t bothered to find out can kill you in any type of serious negotiation.• Despite my jungle book examples above, the devil really is in the detail in serious negotiations. Get all the professional help you can trust. But do not surrender control of the negotiations or the agenda to such professionals. They are not the ones who will have to live with the consequences—you are. Professional advisors are there to explain and advise, not to decide.• If your advisors are leading you down a path you don’t approve of during your negotiations, call a “time-out” and tell them privately that if they continue along that route you will get yourself some new advisors. The world is full of them.• Never fall in love with the deal. A deal is just a deal. There will always be other deals and other opportunities.• Avoid auctions in business like the plague—unless you are selling something, that is. You will nearly always pay more than is wise if you are the “winner” of an auction process.• The negotiator opposite you is not your new best friend. He is not your partner. He is not your confidant. You have no obligation, outside of ordinary courtesy, to please him or satisfy his demands. He is the enemy. If you do not understand that real winners and real losers emerge from serious negotiations, then you will be robbed, whatever the circumstances.• Take no notice of management manuals that tell you to leave passion and emotion out of the negotiating room. If you are emotional or passionate about something, then let it show. But leaven emotion with courtesy, and, if possible, with wit. If you’re not the witty type, then flattery and self-deprecation are good substitutes.• Listen when engaged in serious negotiations. Then listen some more. You are in no hurry. Nobody ever got poor listening. Also, use silence as a weapon. Silences are disconcerting. People tend to fill silences with jabber, often weakening their bargaining position as they do so.• Choose a rogue element to your advantage and bring it into the negotiation at a late stage. You’ll be amazed at how often this tactic produces results.• The British created the largest geophysical empire in the world with one tactic: divide and rule. It always works. It never fails if you can get to exploit it. Get to know the other side. There may be slight differences in the individual approaches of their senior managers and, possibly, in their goals. Drive a wedge and keep hammering.• Permit no such weaknesses in your own camp. I have often banned senior executives from taking part in negotiations simply to avoid this trap. Better you are in there on your own, outgunned, outflanked and outmaneuvered, than to have two or three of you silently squabbling.• Everyone thinks they are a great negotiator, but most of us simply are not. If it’s your company, then, for better or worse, you are the final arbiter. That remains true whether you are a good negotiator or a bad one.• If you suspect you perform badly on such occasions, do not attend, even if you are the 100 percent owner. Get someone else to do it after setting out your response to every conceivable option that might arise. This tactic can be devastating to the other side, and Peter, Bob and I have used it on many occasions in the past. You have to trust your nominee completely, though.• Above all, establish where the balance of weakness lies in any serious negotiation. Most strengths are self-evident, especially strengths like cash and infrastructure. Weaknesses are usually hidden. Ferret them out, hold them up to the light and make a battle plan.• Whatever you agree to during a negotiation, fulfill the bargain. Nobody wants to do business with a weasel or a chisler. Written in the Zoroastrian Scriptures two-and-a-half -thousand years ago was this: “Never break a covenant, whether you make it with a false man or a just man of good conscience. The covenant holds for both, the false and the just alike.”
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I will leave you on this subject with the words of Britain’s closest rival to Machiavelli: Francis Bacon. Bacon “negotiated” his way from relative poverty to the very pinnacle of wealth and power in England under King James I. Then lost it all, and spent his last years writing and studying. His Essays are among the wisest, most thought-provoking (and meanest) set of instructions ever published in English. I sleep with them by my bedside.
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If you would work [negotiate with] any man, you must either know his nature and fashions, and so lead him; or his ends, and so persuade him; or his weakness or disadvantages, and so awe him; or those that have an interest in him, and so govern him. In dealing with cunning persons, we must ever consider their ends to interpret their speeches; and it is good to say little to them, and that which they least look for. In all negotiations of difficulty, a man may not look to sow and reap at once; but must prepare business, and so ripen it by degrees.
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This is from a short essay (short even by Bacon’s standards) entitled “Of Negotiating,” published in 1625, nearly four hundred years ago. Every word of it is true today:
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Private property began the instant somebody had a mind of his own. —EDWARD E. CUMMINGS, AMERICAN POET
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How can you buy or sell the sky, the warmth of the land? The idea is strange to us. If we do not own the freshness of the air and the sparkle of the water, how can you buy them? — CHIEF SEATTLE, NINETEENTH-CENTURY AMERICAN INDIAN CHIEF OF THE SUQUAMISH
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How can anyone truly “own” anything? Surely the answer is that we can claim no such thing. No animal but man lays claim to owning things or places. They merely defend them—their lives, their mate, their cubs, their pack, their territory, their food.
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We purport to believe that individuals can “own” the most astonishing things; that they can own islands, mines, mountains, forests and areas of the sea. Even more astonishingly we pretend that mere names can own such things, for what is a partnership, a corporation or a country but a name? And to top it all, we believe that a name can own an executed idea—for that is the basis of corporate intellectual ownership. The very type of ownership that has been the foundation of my own wealth.
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Perhaps even more preposterous is the universally accepted proposition that an individual or entity can “own” land, rivers, hills and deserts where dinosaurs freely roamed for uncounted millennia. Roamed, mark you, long before Homo sapiens sapiens was a twinkle in a small, shrewlike mammal’s eye. Not to mention that those lands, hills, rivers and deserts will be there when not even a whisper of evidence survives to show that humans existed on the blue planet. This is not a book about philosophy, sociology or the history of human law, but I believe it is worth remembering that ownership of any kind is nonsensical. It is absurd and defies reason because we are all mortal and we cannot (as yet) take it with us.
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So what’s this got to do with getting rich? I could say, “Nothing, but thank you for letting me get it off my chest”; but I won’t say that, because my amateurish musings illustrate very nicely just how idiotic the getting of wealth, as a goal in and of itself, really is. “Ah,” but you could argue, “that’s all very well for you. You have already made your pile. It’s easy to be philosophical when you’ve already amassed a fortune.” And my reply would be that there is truth in that, but there is also truth in the assertion that I may well have been only able to put a few hundred million dollars in the bank because I recognized that this getting rich malarkey is just a game. A delusion, if you will.
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Being rich is fine, and at the very least is better than being poor. But it shouldn’t be the be-all and end-all of your life, or anyone’s life. If you can laugh in the midst of early poverty and in the face of real adversity, and if you can still laugh when you’re coining it in, then you will almost certainly continue to coin it in. But if you chase money desperately in the earnest belief that you can never be happy without it and seriously think that the chase is a meaningful occupation, I doubt very much you will succeed. You have to be fiercely determined, true. But an appreciation of the absurdity of the chase helps enormously.
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As the author G. K. Chesterton puts it in one of his Father Brown stories: “To be clever enough to get all that money, one must be stupid enough to want it.” Mind you, Chesterton wasn’t exactly averse to fine food and wine himself.
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Why Ownership Isn’t the Important Thing—It’s the Only Thing
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So if ownership is a delusion, and we are all nothing more than consenting thieves, how can we become successful thieves as early as possible? The answer is simple. Very simple, and if you want to be rich then I ask you to stop skipping paragraphs and pay close attention. To become rich you must be an owner. And you must try to own it all. You must strive with every fiber of your being, while recognizing the idiocy of your behavior, to own and retain control of as near to 100 percent of any company as you can. If that is not possible, in a public company, for example, then you must be prepared to make yourself hated by those around you who are also trying to be rich
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That is the dirty, rotten little secret of it all, my friend. Just like Gollum, it is your Precious and they are all “filthy little thieves.”
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To become rich, every single percentage point of anything you own is crucial. It is worth fighting for, tooth and claw. It is worth suing for. It is worth shouting and banging on the table for. It is worth begging for and groveling for. It is worth lying and cheating for. In extremis, it is even worth negotiating for.
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Never, never, never, never hand over a single share of anything you have acquired or created if you can help it. Nothing. Not one share. To no one. No matter what the reason—unless you genuinely have to.
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less tax? That’s shocking. I’ve made more than that in deals I can barely remember now. I once made a million dollars by selling a magazine I had not even published yet to a rival. A million dollars for a day’s work. And why? Why? Why? Because I owned it. I owned it all. And my dear friends David and Robin never owned anything during their time there except for a pile of EMAP share options, a good salary and a lovely pension. Please think about this if you want to be rich. Ownership is not the most important thing. It is the only thing that counts.
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Nothing else counts in the getting of money. Shareholder thanks do not count. A good salary and a company car and health plan and pension don’t count. Most share options (usually nothing more than the promise of chickenfeed to salaried employees, and a promise broken half the time, too), don’t count. The gratitude of colleagues doesn’t count.
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If you haven’t much skill, or much wit, or much talent, or much luck, and yet you insist on owning more than your fair share of any start-up or acquisition, then you can become rich. If you take what you’re given, you will probably not get rich.
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Years ago, in the early days of my company, four of my colleagues got together and had a long talk, I assume in a pub, although I cannot be sure of that. One was a senior manager, one was a publisher, one was a designer and the other an editor. Together, they hatched a small conspiracy. Knowing how important they were to my little company, they confronted me and demanded a share. They bearded the lion in his lair. They were polite and civilized about it. They pointed out that I owned 100 per cent of the company and could easily afford to share out, say, 20 per cent between them. It wouldn’t cost me anything and it was only fair. Those were the words they used. They were working just as many hours (10-12 hours on a good day) as I was and they were committed to making the company a huge success. They were even willing to discuss a slight reduction in their salaries in return. In addition, they went on, I should remember that such a “dispersal” (I remember they actually used that word, too) would incentivize them mightily. Such a gesture would never be forgotten. And my remaining 80 per cent of the company would ensure that I was still the boss. However, should I not “disperse” these shares among them, they intended to leave. And leave immediately, virtually without notice. They would have no option but to do so, although they didn’t want to. The company would suffer dreadfully—and might even fail altogether. They had already agreed on the name of their new company, in case I wouldn’t play ball, and had even registered it. They would set up as rivals. They were serious and they meant business. All of this unpleasantness could be avoided if I would just hand over a pitiful 20 per cent to them, perhaps based on future performance? Both as friends and colleagues, they earnestly advised me to consider their demands dispassionately and honestly. In my heart, they argued, I knew they were right. It was only fair. I fired them on the spot.
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I would run the entire bloody company myself, write the articles, design the pages, answer the phone and sell the ads if I had to. But I would not part with a single, solitary share. Not for love. Nor for fairness. Not for loyalty. Not for anything. And certainly not for moral blackmail.
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Over the next thirty years, I estimate that their suggested 20 percent, had I handed it over, would have earned those four gentlemen around $80,000,000—say it again—eighty million dollars, in current asset value and past dividends. This is the problem with sharing ownership
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And if I had given 20 percent to those four employees, should I not have had to do so with many others as they joined the company and worked hard to make it a success? Where would it all end? I’m not a bloody charity. I’m an entrepreneur trying to make a small fortune
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I pay people to get a job done. And I pay them well. I try to make it as much fun as I can along the way. I reward senior managers with bloody huge bonuses based on performance and results. Millions of dollars have been paid out in such bonuses over the years. But I will not give them a share. Not one. Not for love. Nor for loyalty. Not to be fair. Because capitalism isn’t fair. Life isn’t fair. The lottery of what genes we are born with isn’t fair. The moon and the stars and the gas clouds of Alpha Centauri aren’t fair.
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Except for your loved ones or closest friends, it’s every man for himself in this world, in case you haven’t noticed
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The best kind of fairness is the kind that makes money. Lots of money. Then you can decide to do with it whatever you wish. And there’s even a whole chapter at the end of this book about it. (See Chapter 18: How to Stay Rich.) But we can’t be wasting time thinking about and debating fairness while we are in money-making mode. Money making and fairness having nothing to do with each other.
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Just how nasty can this all get? Say you have a brother and you want to start a business together. You should begin with the proposition that you will own the business and he will work for it. Fight for this tenaciously. Begin by assuming it. If that won’t fly, then absolutely insist that you own 75 percent of the shares. The reasons are immaterial. Make a spurious list of them and wave it about. Say you won’t go into business unless you own the majority share. Have a temper tantrum. Shout. Scream. Wave the bloody bit of paper about again. Say you’ll work longer hours. Say you will find more capital than he will. Say anything. But get a bigger share of the company for yourself. Then, and only then, should you return to being a reasonable human being.
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Would I do it to my brother, Julian, whom I love very much? Yes. In a heartbeat, if I had to. Would I give my brother all the money I ever made if he needed it? Yes, I would. But I will not give him a share in my company!
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In the UK, I clung to my 100 percent ownership like a limpet. In the USA and elsewhere, I happily hitched up with Peter and Bob. And we are still hitched, decades later. We have together created many companies, which have operated in many countries. We have split the ownership of those companies in a dozen different ways. Once, I owned 80 percent and they owned 10 percent each. On another occasion, we owned 33.3 percent each. On more than one occasion I have been a minority shareholder. It never mattered. The partnership has held like a rock through all the stormy weather and the trials and tribulations that are the lot of any long business life. We have shouted at each other a few times and we have cried on each other’s shoulders more than once. We have enjoyed the thrill of the chase immensely. We have helped to make each other millionaires times without number.
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I believe I have been a good partner and an honest one for Peter and Bob. And I know they have been good and honest partners for me. We make a good team. I am the creative maverick and usually the risk-taker. Peter is the cautious, stubborn and worldy-wise one. He’s hard to convince. But he is a great negotiator in a clinch. Bob is the nuts and bolts wild card. He does not suffer fools or errors gladly. He goes through “the numbers” with a voracious appetite for them.
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That’s the best part of a true partnership. You always have a brother to help carry the load. And if things go wrong, you have a built-in drinking buddy with whom to drown your sorrows! And you have a built-in conscience, too. No bad thing.
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So if this is the case, why am I so insistent upon outright ownership, or, at the very least, as much as you can wangle? It’s simple. I could always walk away from the partnership with Peter and Bob if we fell out. I had my own company doing my own thing under my own control three thousand miles away. And I believe the same has been true for them. Despite our close friendship and real affection for each other, this knowledge, that any one of us could walk away from the others if he wished, that illusion of freedom—if illusion it was—made it possible to compromise with each other when things got tough in our partnership business
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If Peter and Bob had represented every iron I had in the fire, if our partnership had been the only hope I had of making real money, then I believe it might well have disintegrated almost before it began— never mind lasting for three decades. A partnership is not a marriage. In a marriage, you should be willing to die for your partner. To share everything. To kill for them, if you have to. But in a partnership, the making of money comes first. Friendship and affection come later—if you’re lucky, as I have been.
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my earnest advice is that you establish yourself first, retaining as much control of any start-up or acquisition as you can, and then, and only then, seek pastures new with partners in the picture
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Ownership means never having to waste time saying sorry that a business didn’t work out. It means not having to spend weeks and weeks trying to persuade your partners that a certain course of action is necessary. It means that, for better or worse, you can concentrate on building the business and making money. Or losing it without the added burden of guilt.
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I have owned companies with minority shareholders. And I have always gone out of my way to be fair to them and their interests. But I cannot pretend that they were not a burden. Let me explain by way of example. Should I wish the company we co-own to invest all its profits for three years to build itself, a minority shareholder might (understandably) complain: “It’s all right for you. But I depend on the dividends the company would pay me if we did not invest so much. I want to protest at your investment strategy.” Then begins a long, tortuous affair of meetings and spreadsheets and jockeying for position. Not because I could not force the issue. But because to force the issue will waste a lot of precious time and energy. Even more time and energy than those endless meetings will take.
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if you want to be rich and you are forced to take minority shareholders on board, then I guarantee that, sooner or later, you will waste weeks or even months in the attempt to obtain mutual agreement. It is unavoidable.
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I believe you should be cautious, very, very cautious indeed, before you take up with a partner or invest as a minority shareholder. At the very least you should spend hours with a patient, sensible lawyer (if you can find such a creature), going through the Memorandum and Articles of the new company. Every minute you spend on that task may well be repaid a thousandfold, a millionfold at some point in the future
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Unlike a marriage, you must contemplate the endgame before taking the plunge. Just how will it end? How can it be ended with least damage to the business and the hearts and minds of the partners? These are questions you must consider seriously before you sign the partnership documents.
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In summary, unless you already own a successful business outright, then I do not recommend you enter into a partnership of any kind if you can avoid it
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There is absolutely no comparison between running and owning a private company and running a public company. (Note: by definition you cannot “own” a public company, although you can certainly control one, providing you are willing to put up with a great deal of scrutiny.)
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We were about to be entrusted with massive quantities of the public’s cash. And if we screwed up in any one of a hundred ways, then it was chokey for us, go straight to prison, do not pass go, game over. I learned, for example, that after we were a public company and I was a director of that company, then should I be foolish enough to accept a call from anyone, or meet them over lunch, and casually mention that business was particularly brilliant right now and that we would be announcing that fact formally in the near future, then I placed myself in peril. Worse still, I would place Peter and Bob and my other fellow directors in similar peril. Should the person I had so casually spoken to then rush out and buy my company’s shares, I might well find myself in prison. Should he then send me a case of the finest Pomerol wine on the planet merely to thank me for what I’d told him, then I would definitely go to jail. And so might Peter and Bob.
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this was just one of hundreds and hundreds of such rules and regulations we had to remember. Peter would sit with me over a drink and lecture me endlessly on keeping my mouth shut about our business. I became so paranoid that I almost turned into a voluntary mute. It was crazy and depressing
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Going public made me a fortune. And unlike a private business, it seemed that the more we divested (sold off) our shares, the richer we became, because more people bought them and the more those shares we still had left were worth. That sounds weird, but it’s exactly what happened.
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There were other weird rules and mantras we had not faced as a private corporation. Growth was apparently all that counted. Growth in share price. Growth in corporate revenues. And being in the “right” markets (like the Internet, at that time). Profits were not the issue. Nobody seemed to care that not a cent had ever been made by any company trading on the Internet back then. All that mattered was that we achieved compound growth in flavor-of-the-month markets.
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we never really got the hang of it the way Peter did. We kept thinking like entrepreneurs, making unhelpful entrepreneurial suggestions. Personally, I was way out of my depth—and was all too aware of it.
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A private company could never have operated in the way Peter was required to run MicroWarehouse. A private company lives on profits and reserves. There has to be a balance between investment and profit-taking. Between growth and the bottom line. In a private company, growth is not a goal in itself; you only grow if it makes sense to grow. But a public company exists only to boost its share price, and its share price is determined, incredibly enough, by “analysts”—spotty-faced youths who live on another planet where growth-at-any-price is the only deity one is encouraged to worship
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It almost seemed, at times, as if profit was a dirty word. If we were making “profits,” asked the “analysts,” weren’t we in danger of “wasting” money that could have been invested to produce more “growth”? Huh? Madness! But it made me very rich
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That’s all I know, and all I want to know, about public companies. From my perspective, they are not sane places and their share prices are not decided by sane people. Perhaps it’s different when a company has been public for many years. But the first few years of any such enterprise are ones of gut-wrenching adjustment, soul-destroying workloads and barely concealed terror. It’s a high price to pay for those at the sharp end.
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Work is of two kinds: first, altering the position of matter at or near the earth’s surface relatively to other such matter; second, telling other people to do so. The first is unpleasant and ill paid; the second is pleasant and highly paid. —BERTRAND RUSSELL, “IN PRAISE OF IDLENESS”
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Delegation for many, then, will only stretch so far. But for most of us with a desire to get rich, it will take us further than the inexperienced could believe. And, as Bertrand Russell noted, it is by far the most pleasant part of the whole business.
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because the exercise of delegation, used responsibly, allows you to bring out the best in others and to make yourself rich in the process. It is the nearest thing to a “virtuous circle” imaginable. Just imagine getting rich while you’re helping others to help you get richer and prove their worth in the process. Magic!
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It used to be surprising to me why so many people appeared to have a problem with delegating. But I finally figured it out, and the answer isn’t a pretty one. It concerns our old bugaboo, ownership. If you own a company and that company’s purpose is to make you wealthy, you will be content, delighted even, for any amount of glory to go to anyone who works there, providing you get the money. It is in your best interests to delegate whenever it makes sense in such circumstances.
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If you do not own the company, or a part of it, then it is possible you are only a senior manager because you like power. It is not true of everyone, of course. But often enough. You like bossing people about. You enjoy telling them what to do. If that is the case, then you might be understandably reluctant to delegate real power or opportunity, in case the person you delegate to proceeds to excel. This, in turn, may well demonstrate to the rest of the company what a ho-hum manager you really are. This is a warped way of thinking. But I am convinced it lies behind much of the reluctance to delegate I have encountered in my business life
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Bossy people and glory hounds are mostly interested in building a power base so they can have yet more people to boss about. It’s pitiful and a little sad, but we have all seen it. We saw it in school. We saw it in the playground. We saw it in college. And we saw it in our first job. If you are observant, you have been seeing it nearly all your life. Such bullies and toads appear to cover the earth. They often gravitate toward jobs that give the appearance of power but which require low(ish) skill levels
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They are mostly an obnoxious nuisance. But cleverer specimens are also probably working right next door to you today. The truly evil ones, through a combination of fawning, flattery, smoke, mirrors and luck (and occasionally, even talent), have risen to the middle ranks and have people reporting directly to them.
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When they do delegate, they enjoy delegating tasks they believe are either impossible or beyond the recipient’s ability to complete satisfactorily. How do you counter this idiocy? You don’t—unless you own the company, in which case you fire them. I have fired a few. It was the only time I enjoyed firing anyone.
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You can’t deal with bossy, puffed-up sods who won’t train you and won’t delegate. You can only move departments or change your place of work. It isn’t worth the time to do anything else.
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The whole point about getting rich is not to have to deal with this nonsense. Office politics can be fun, as can all forms of politics, but to many people they are upsetting. They reduce productivity and dent morale. They can take up astonishing amounts of time. They increase the number of “sick days” in a department—which is often a good indication that a toad is in charge and needs to be winkled out of its hole.
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True delegation is an entirely different matter and can often be a joy to be involved in. On both sides. As an owner, or an owner in training, you must always be alert for the telltale signs that here is a candidate for promotion and delegation. They are smart. Perhaps smarter than you are. They work hard and they appear to love the work they do. They ask intelligent questions and don’t waste time gossiping and mucking about. They listen and correct their errors, and don’t repeat them. They want your job. Especially in the early days of your company, delegation and promotion are among your most powerful weapons in getting rich. Men and women with spirit will be prepared to leave safe, comfortable jobs and work for you, providing the atmosphere of the new operation is loaded with optimism, adventure, the sweet scent of delegation and the promise of promotion. Not everyone works to get rich. In fact, most people do not. But almost everyone wishes to be respected. With promotion comes respect. And with delegation comes promotion. If your company is young and a bit rickety, meritocracy, delegation and promotion are the bricks and mortar that will make it stronger.
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Do not seek a replica of yourself to delegate to, or to promote. Watch out for this, it is a common error with people setting out to build a company. You have strengths and you have weaknesses in your own character. It makes no sense to increase those strengths your organization already possesses and not address the weaknesses. If you are bad at keeping records and filing and tend sometimes to shoot from the hip, for example (that sounds a familiar description! ) then bring in people who have the organizational skills that you lack and who tend to be of a more even disposition. It’s so easy to delegate important work to people who are similar in temperament and skill-sets to you, or to promote them. So easy and so wrong.
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By setting an example early on with a program of carefully tailored delegation and well-deserved promotion, you will create an atmosphere of loyalty, efficiency and camaraderie that feeds upon itself. An atmosphere poisonous to toads.
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Any leader will tell you of the importance of morale. And it is important. It cannot compensate for sloppy work, or for lack of persistence or belief in yourself. It cannot compensate for a lack of determination to succeed or for ill fortune. Nonetheless, good morale, a pervasive feeling of “us against the world,” combined with the promise of responsible delegation and promotion based on achievement, can move mountains. And under those mountains is gold. Your gold.
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what exactly is delegation? Let me put it this way. The work undertaken by your colleagues and employees is more important than your work. Your job is merely to lead, perhaps just to point in the right direction
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Month after month, in those early days, I battered myself and my staff into setting world records for stamina and effort. Did it make me rich? No. It made me tired, bad-tempered and arrogant. It led me to make errors of judgment which I would have avoided had I gone about it a smarter way. In essence, all I did was show my troops that I possessed awesome stamina. I was the toughest digger in the mine and I could shovel more coal than any two of the rest of them put together. Big deal. I had forgotten that I wasn’t in a bloody mine. I wasn’t being paid for the hours I kept. Miners rarely get rich. They merely build a legend if they are strong enough or unlucky enough to waste their life in an unhealthy and poisonous environment. Fortunately, this fit of madness (it lasted about three years) eventually passed. I only started to get rich when I began to delegate and to ease up on my work schedule.
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My company was lucky to survive those early days and I owe a real debt to the colleagues who worked with me back then. It probably helped that my company was a fun place to work, otherwise it might not have survived. Added to which, hard work never bothers the young. They think they are built of steel.
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For example, I used to fancy myself as a great negotiator in big deals, but I have learned that I am not. The reason is that I never do negotiate. I only dictate. That’s fine if the other side’s need is greater than yours in the balance of weakness. But what if there is a potential win-win situation to be reached through patient and reasoned negotiating? That’s when I delegate. Automatically and without thinking. I have people who work for me who are patient, who listen better than I do, and who are quietly determined to get the best deal they can with a potential partner while not scaring them off. They are willing to compromise, but not to surrender. Long after I would have lost interest and wandered away to find something more interesting to do, they will still be patiently negotiating until an agreement is reached. These are not people I would ask into the room to negotiate the sale of a large asset. They have too much empathy with the other side. But for the majority of symbiotic deals and arrangements a company needs to make, their skills far surpass mine.
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What else do I delegate? Almost everything now. I do not run my companies and have not done so for many, many years.
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Instead of attempting to stay in day-to-day control, I have devised a system where I keep overall control, but do not involve myself in running a business unless I wish to get involved for a particular reason. I use the power of veto instead. By making myself the chairman of all my companies, I can choose to attend or not attend senior management or board meetings as it suits me. On average, I will attend four to six such meetings a year for each company. The chair is usually taken in my absence by the MD, the president or the CEO. Verbatim minutes are taken. (I do read all the minutes of these meetings very carefully, and I can get a mite cross if they are not produced promptly and accurately. For me, they are not a memorandum of past events. They are a tool to understanding current positions.) I also have Ian Leggett, my personal financial manager as well as my group CFO, placed on all these boards. If I am not present, you can be sure he is.
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My vetoes are carefully explained and very well known to all of my executives, who agree to abide by them before they join the board. It’s a short list, but has worked well for many years. Without my express permission:1. They may not vote anyone on or off the board.2. They may not physically move the headquarters of the company.3. They may not dispose of, or shut down, any substantial asset.4. They may not purchase, or launch, any substantial new product or business.5. They may not award themselves bonuses or salary increases.
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If things go wrong in a particular part of the business, then I will get involved. When we are about to launch, sell or close something, I am always involved
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To run a group of companies like this you have to trust your managers and directors. You can only do it if you have learned, by long experience, the art of delegation. It is important to distinguish between delegation and abandonment. Absentee landlords never prosper. I am not absent. But I am not exactly toiling with the troops side by side, every minute of every day. My days of toiling in those particular mines are well and truly over. To be honest, I suspect my managers prefer it that way. They certainly get to take more scary decisions more often. And that’s half the thrill of their job, I hope. As our senior management turnover rate is one of the lowest in the industry, and has been for years, my system must have something going for it.
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One thing I do to compensate for this style of ownership is to look hard for signs of excellent work. When I spot it on one of our websites, or in a magazine, or from management minutes or financial results, I drop a handwritten note to whoever is responsible. And I do it often.
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Why do I do things this way? Because I want to write poetry and plant a forest in the heart of England, and that takes a lot of time. Because I have a life and intend to lead it. Because I have discovered that many, many people are better managers than I am. Because I have learned that obsessive micromanagement scares away talent. And most of all, because I learned to delegate a long time ago and to accept that you must allow young managers the opportunity to make mistakes without crushing them or blaming them when things go wrong. (You can always fire them if they make the same error over and over.) Because I love to see talent grow in the stable and watch it come hurtling out of the box at full gallop. Because it makes me a little proud to be a part of such a process
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have you ever considered how the growth of such devices has conspired to damage and corrupt delegation in the workplace? If you go on holiday or a business trip and keep obsessively in touch via a mobile phone or BlackBerry with the office, what does that say about your management style? About the trust you have in your colleagues minding the ranch? It says you don’t trust them. It says you cannot delegate meaningfully. It says you are a meddler and a micromanager. So don’t do it!
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Delegation is not only a powerful tool, it is the only way to maximize and truly incentivize your most precious asset—the people who work for you. Real delegation can help make you rich. But only if you work at it.
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What is robbing a bank compared with founding a bank? —BERTOLT BRECHT, DIE DREIGROSCHENOPER
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In most of mankind, gratitude is merely a secret hope for greater favors. —DUC DE LA ROCHEFOUCAULD
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I believe in incentives that help concentrate the mind and bring a sense of competition and purpose to management.
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Use the annual profits of a company to grow the business by all means. One of the ways of making it grow is to carefully craft bonuses for those who work for you to achieve margin, cost and revenue targets. This is a great idea even if you are going short at the time yourself and your sales manager is earning more than you are that year. Sounds crazy? Well, it worked for me!
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But when it comes to a sale, when you cash in your asset for big bucks, then I dispute the necessity (or even the fairness, not that life is fair) of handing over substantial chunks of the big bucks to people who did not risk their cash or livelihoods to create the business.
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Almost certainly the people now working for an asset sold by you will continue in their employment under a new owner. If not, they will be compensated— the law, not to mention common decency, ensures it. Why then would you want to hand them a windfall? You’re not responsible for motivating them any more. The new owner is.
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Risk equals reward. “An honest day’s work for an honest day’s pay” is not risk-taking. If you work in my mine, I’ll pay you fairly, try to make it a great mine to work in, incentivize you if it makes sense for the company to do so, contribute to your pension, perhaps contribute to your health care and the health care of your family, teach you to grow your skills and thereby improve your personal net worth, ensure you have paid vacations, ensure you are not bullied or in any way discriminated against, and concern myself with your personal safety at work. I will do all these wonderful things in a thoughtful and consistent manner. But I will not share out the pie with you when I sell the mine and its mineral rights. Fair enough? If you don’t think it’s fair, please take a job somewhere else. I accept that that is why I am rich and you are not. But that is how the system under which we labor is constructed. If you want to change it, go into politics. (You won’t change it there, either, but that’s another story.)
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Your aim, as an owner, is simple: it is to improve management efficiency, productivity and frugality, and thereby improve future profits while still encouraging growth. But the balance is crucial, and many managers attempt to reach their targets simply by cutting costs. This can be fatal.
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Instead, the balance between annual profit and investment for future growth is the key. Revenues versus costs is important, but the latter should not be cut merely to meet management bonus targets.
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For whatever reason, a surprising number of first-class employees (managers or otherwise) are not overly motivated by money. They want security, or respect, or the chance to learn or the opportunity to shine. Often they require little more than a decent salary in a company where they feel motivated and valued.
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You won’t get far if you attempt to financially “incentivize” the salt of the earth. Praise, the ability to discern when a good job has been done and the courtesy to say so, fairness, integrity and camaraderie should be employed instead. It takes more trouble than mere bribery, but it produces wonderful results.
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If I were writing a book about how to be happy, then I would recommend much to you along the same lines. Love of any work, diligently undertaken, no matter what it is, brings contentment and, eventually, respect. But it will rarely bring you riches. And that is what you are reading this book for, is it not?
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in the Bhagavad Gita, a Hindu holy poem from a religion which was old before the coming of any Jewish prophet, we read: “Set thy heart upon thy work but never upon its reward. Work is not for a reward: but never cease to do thy work.”
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Sooner or later someone is going to try to steal your pie. This will not be unfair. You almost certainly set out to steal someone else’s in the first place and may well, to some degree, have succeeded. There is very little that is new under the sun and the supply of pie is not infinite.
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Here comes another wannabe or a great big corporation. They like the look of what you’ve been baking in the kitchen, and decide to bake something very similar. They want to put you out of business.
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What to do? First let’s take a look at the nature of rivalry and competition in a capitalist society. Competition is all that makes capitalism bearable. Without rigorous competition, all forms of Western-based societies would soon be ruled, not by parliaments or their equivalent, but by fat, bloated and impregnable monopolies. (Some would argue they already are.) You wouldn’t like it much. People of my age and older have personal experience of it. You think I’m joking? Obviously you’re not old enough to remember the days before rationing ended. Or the days before Freddie Laker introduced the concept of cheap air travel. British Airways and their American cousins ruled the roost at the time, and charged whatever the hell they wanted to charge for you to fly. They had virtually no competition. You paid up, or you stayed grounded.
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Or perhaps you cannot recall when the GPO (the General Post Office) was in charge of telephone communications—which were then hived off to British Telecom in a bogus “public flotation.” They, too, had no competitors. “You’d like a new phone in your flat? Certainly, madam. That will be loads-a-money up front and we’ll come to install it at our convenience—shall we say in four months?” Four months if you were lucky, that was. And if you didn’t complain. Britain in the 1950s, 1960s, 1970s and much of the 1980s was ruled by a combination of monopolistic, undemocratic unions who spent all day arm-wrestling with a bunch of monopolistic, undemocratic nationalized industries. British citizens never got a look in. The word “customer” was alien to almost everyone involved, except what was left of “private industry.” Around the world, by friend and foe alike, the UK was called the “Sick Man of Europe,” and that’s exactly what we were. All because so much competition had been sucked out of the country by the creation of monopolies
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I am a Labour Party man born and bred. I will die voting Labour. It’s a tribal thing. It’s plain stupid. But I still believe (well, just) that “the inch of difference,” as my friend Richard Neville put it, “between the Conservative and Labour Party, is the inch in which my friends and I live.”
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lack of competition nearly ruined Britain
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Competition isn’t some misty-eyed concept that should be confined to students of the “dismal science,” Economics. Competition is the heart, soul, liver, lungs and kidney of the beast we call Western capitalism. How you react to it, how you face up to it, defines whether you can stay rich, and probably whether you can get rich at all. I’m a fighter. My natural reaction to provocation in business, as in life, is to attack.
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if I sold 51 per cent to Ziff Davis. It meant loss of independence. It meant that if I agreed, and Bill or his CEO called me up on a Monday morning and asked me to pee in the blue urinal that week, then I would have to pee in the blue urinal. I would be transformed into a hired gun-slinger, trampling over Europe, swamping rival computer magazine publishers with launches of high-quality product backed by huge investment. I would become something like a traveling salesman. A very rich traveling salesman, true. But still a salesman. A hired gun.
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Maybe there was a chance. To fight. To prove I was better than them, better than anyone, in my own backyard. Maybe it wasn’t totally hopeless. But I needed allies. And I needed money. So I did what I never did, I got down on my belly and squirmed over to see my rival, VNU, who had a fancy office building several blocks away in Soho.
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the enemy of my enemy is my friend. Especially when my enemy is on the attack with his dagger at my throat.
Note
Entrepreneurs only have frenemies?
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A public company has to be careful. It cannot make alliances like private companies can. There are a million ways it can fall foul of the laws governing the governance of public companies. Graeme could not exactly promise me that VNU would join with Dennis to see the invading tiger off, but he could suggest various hypothetical scenarios and leave the rest to silence and a raised eyebrow. I got busy. VNU got busy. I turned down Bill’s offer, and I believe that Bill was a little mystified by that decision. Together, but without colluding (honest!) we fought Ziff Davis
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I used every dirty trick and stratagem I could think of to attack the Ziff juggernaut. We nearly had nervous breakdowns. And we spent money like water to take the fight to them. We would not give in. And we won. Eventually, they folded their tents and drifted away into the night. The combined forces of VNU and Dennis, with a teensy bit of help from EMAP and my friend Chris Anderson at Future, saw the buggers off. But at what cost? At the cost of two years’ entire profits, my friends. Two years’ profits is what it cost us to defeat Bill Ziff.
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I know that competitors can be a source of inspiration as well as irritation
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The way I got rich and shared (and continue to share) my annual pie may not suit you or your own circumstances. That said, I suspect some of the points that follow are universal truths:1. Make annual bonuses generous. If you want your managers to concentrate on improving margin and profitability while growing the business, then they have to feel the light is worth the candle. Pay them well for performing well. (They will have many excuses to make to their lovers or spouses for working late to achieve the goals you set them.)2. “Ring fence” investment costs from “ongoing” business. You want the business to grow but you also want to make profits. Balance is the key. By “ring fencing” all investment money for new projects and growth in your annual accounts, you can encourage managers to work on margin and profit from their “ongoing” parts of the business while offering them the chance to grow and take some risk. This equation requires patience and goodwill on all sides. But it can be done, and it works.3. Keep costs down. Always. “Overhead walks on two legs” and will eat you out of house and home. No company, new or old, can avoid stealth growth in overhead. It occurs, as it were, by osmosis. Prune overhead regularly. Stop only when the pips squeak.
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At senior level, insist on collective responsibility for bonuses. Part of the annual incentive bonus for senior managers should result from their combined efforts to bring home the bacon. One cannot make a senior manager’s whole bonus rest on this edifice. But peer pressure is a powerful force. If senior managers sense one of their number is slacking and fear they may all suffer for his or her transgressions, they are likely to let their feelings be known. Forcefully.6. Praise excellent work. But do not waste your praise on ho-hum performances as a sop. Employees respect a boss who knows the difference between the mundane and the exceptional. Remember that not all employees respond well to incentive bonuses or a dangled carrot of any kind. They seek recognition, not bribery.7. Fire malingerers, incompetents, toads and glory hounds mercilessly. Not only does firing them make you feel better and contribute to a more pleasant working atmosphere, it cheers up the whole staff.8. Turn a cold eye on company “perks.” These can add up to huge sums. While I am considered terribly old-fashioned on this subject, I am still uneasy about company-issued credit cards; company-issued mobile telephones; travel and entertainment of any stripe at the company’s expense; company air travel in any class but economy.
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Offer legal perks that you have paid for yourself to employees. This sounds crazy, but it works. I allow my employees, for example, the use of my Rolls-Royces or Bentleys for their weddings. I permit them to stay at my homes around the world if they have performed well. I send every child born to an employee (well, I used to in the early days—there are too many of them now) a massive soft toy. Such perks are legal because I paid for them myself from after-tax dollars or pounds.11. Set an example. If, as an owner, you want fancy furniture in your office or works of art or Persian rugs, then bloody well pay for them yourself. How can you expect frugality when a junior manager, who works in a cubicle, comes to visit you, knowing that the company paid for those accessories? There is nothing wrong with them being there. It’s who paid for them that counts.12. Encourage senior managers to go over annual results with you one-on-one. You will learn more from off-the-cuff remarks and opinions expressed at one-on-one meetings while looking over financial results than you will in a dozen board meetings. This tactic never fails to produce food for thought, often on both sides.13. Back up your managers. With delegation comes responsibility. Back up your managers, in public, whenever and wherever you have to. If they do not perform, speak seriously in private to them. If they still do not perform, fire them. But do not undercut them or engage in meetings that appear to undercut them. Reprimand other managers who bad-mouth their peers. Nearly everyone’s ego and self-confidence is more fragile than the outside world believes.14. Search out and promote talent. Talent comes in all shapes and sizes and is often inarticulate and shy. Talent isn’t necessarily the woman in the Calvin Klein suit who talks the talk and bamboozles meetings with stunning graphics on her PowerPoint presentation. Talent is often to be found dressed in T-shirts down in the lower reaches of your organization. Set a bounty on talent among managers. When you find it, test it. Groom it. Work it until it’s ready to drop. Load it with more work and responsibilities. Praise it. Reward it. It will make you loads-a-money.15. Interview your rivals’ talent. I have never known a single person in a rival organization, however well paid or cosseted, who has refused to meet me for a quiet drink after work. I have discovered more about what my rivals are up to in this manner than any other. In addition, I have often been so impressed with the people I met in this way that I poached them later. No intelligence-gathering exercise is ever entirely wasted in business. There is only so much pie. Talent bakes that pie.16. Discourage secrecy. The more you take middle and senior managers into your confidence, the more they will respect you and the harder they will work for you. Many managers disagree with this policy. They love the feeling of power that comes from knowing what others do not know. I don’t care about power. I care about getting rich.17. Save a little bit of pie for suppliers. Save a little of the annual pie to wine and dine key suppliers. Or let them wine and dine you. If you like them enough, invite them to your home. We all remember to call often upon our major customers. But it is worth remembering suppliers. And they often have important market information.18. Never bad-mouth rivals. It’s a sign of stupidity and weakness. I try to go out of my way to praise my rivals when I can. Often enough they deserve praise and they’re sure to learn about my comments sooner or later. Why go out of your way to antagonize them? (Secretly feeling sorry for them, because they do not own as much of their own company as you do, is definitely permitted.)19. Sell early. Real money rarely comes from horsing around running an asset-laden business if you are an entrepreneur . You are not a manager, remember? You are trying to get rich. Whenever the chance comes to sell an asset at the top of its value, do so. Things do not keep increasing in value for ever. Get out while the going is good and move on to the next venture. More money is usually lost holding on to an asset than is made waiting for the zenith of its value. I should know—it’s my own biggest defect.20. Enjoy the business of making money. The loot is only a marker. Time cannot be recaptured. There is no amount of pie in the world worth being miserable for, day after day. If you find you dislike what you are doing, then sell up and change your life. Self-imposed misery is a kind of madness. The cure is to get out.21. Never miss an opportunity to promote your asset.
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Why am I a magazine publisher? Is it because I love magazines? No. It’s because I had a tiny success back in 1967 selling a hippie magazine on London’s fashionable King’s Road. That’s right. I discovered that at two shillings and sixpence a time (half for me, half for the owner, Richard Neville), I could earn more money than I could as an R&B drummer or a high-street-store window dresser.
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I even learned that by dressing up one or two girlfriends in the shortest skirts they owned and instructing them to approach every guy under thirty with a big smile and the following words: “Hi! Have you got your copy of OZ this month yet?” I could triple my earnings
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I forgot to keep my eye on the ball. The ball was to get rich. Instead, I decided to become one of the world’s best magazine publishers. Not smart. Why wasn’t it smart? It took me way too long, for one thing, and it cut me off from more lucrative endeavors for another. I became a multimillionaire in 1982. By then I was thirty-five years old. Barmy! By thirty-five I was already half dead.
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If you have entrepreneurial flair, then you can go into just about any business and make money. But instead of rushing to where the money was, I kept on digging in the relatively poor pit of ink-on-paper until the money, reluctantly, came to me.
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This is so important, gentle reader. It pains me to think about it. If you wish to become rich, look carefully about you at the prevailing industries where wealth appears to be gravitating. Then go to where the money is! That is where you should focus your efforts. On the ball marked “The Money is Here.”
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The magazine business will have faded to a shadow of its former glory within a decade or three. It is a mature business, and few fortunes are made in mature industries, unless you are lucky enough to create a monopoly in one. I was luckier than I knew.
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So what businesses should I have gravitated toward? Computer software, technology and dot com start-ups, cable and satellite television, property, environmental waste clean-up, alternative energy services…any one of these might have created a much larger fortune for me in less time than I took with magazines. Do I know anything about these industries? No. But, then, I didn’t know anything about magazines in 1967 either.
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There is no substitute for good timing. There is always luck involved, but it’s often the kind of luck you help make yourself.
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The book there was redesigned by Jon Goodchild, the very man who had taught me to design magazines in the early days of OZ in London
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It was perched on Bruce Lee’s metaphorical shoulders that I first tasted real money and built my first successful business, including a raft of kung-fu magazines and Bruce Lee commemorative mail-order items, masterminded by my old school friend, Bruce Sawford
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Here is the power of timing. Don and I were not great writers, although we improved as time went by. We were not investigative journalists. My company was a hole-in-the-wall operation barely capable of publishing a series of pamphlets, let alone a stable of magazines. Wildwood House was not a home of bestsellers. We were broke. We were inexperienced. And yet, we made a ton of money.
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Not everyone who wants to get rich is going to get lucky with their timing. But what made the timing so good in our case? Three things, I think. One was the blind luck of one of the fittest men in the world keeling over and dying. (If you want to know what he died of, then buy a secondhand copy of our book. And don’t believe anyone else. We really did those interviews with the hospital surgeons and staff and so we didn’t have to make up conspiracy nonsense
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Secondly, we followed our instincts and we persisted with this mad idea, despite our lack of experience or any credentials. But then, who did have the credentials? Thirdly, we acted with extraordinary speed. We put ourselves in the right places at the right time, and we never slowed down from the moment Bruce Lee died. Within weeks, we had finished a book, sold lots of foreign language editions, sold the US publishing rights, published a ton of magazines, invented a lot of mail-order items and then manufactured and sold them to tens of thousands of fans. And what did it all add up to? It added up to focus, following a stroke of luck in the shape of perfect timing. What errors did I make? Plenty. I did not invent enough magazines and I did not invent enough commemorative items early on. Within a year or two, my company was organizing “Bruce Lee Memorial Conferences” and even sending fans on “Pilgrimage Tours” to Hong Kong with Cathay Pacific airline. It was profitable business. But if I had managed to do those things within six months, I would have made far more money. What other errors? I did not write and publish another book. I had enough material to have done so. I could easily have asked a couple of journalist friends to ghost it for Don and me for a pittance. It would have been another bestseller for sure
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But, by then, I had fallen into a trap. I believed I was a biographer. I believed that our biography was a great biography. What nonsense. What I should have done was published a book, with Wildwood House or any other book publisher, called Who Killed Bruce Lee? And this time, I should have insisted on having my company named as joint publisher. Such a book, produced swiftly enough, would have sold millions of copies around the world.
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My errors came partly from inexperience and partly from falling into the trap that I mentioned earlier. They also came from lack of focus. I was allowing my thoughts to wander toward expanding in new directions, mostly magazines, while there was still a cow in the shape of a new book bursting with milk and waiting to be milked. That was a serious error. A loss of focus.
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Paper money itself is an illusion. It is a promise from a man you will never meet, who works for a bank you will probably never enter, who reports to a government you do not control. A £50 note or $100 bill is just a piece of paper with some fancy printing on both sides of it. And what is a credit card but a small rectangle of plastic with which you promise to buy a watch, car, a yacht or even a house? When you bank or spend paper money or use a credit card, you do so as a part of a collective illusion. You already subscribe to what Charles Mackay once rightly called “a popular delusion” or “the madness of crowds.” You cannot use such devices alone. Others must believe in them equally for the magic to function.
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When enough people share a short-lived delusion, vast sums of money can be acquired overnight. The “tulip mania” in Holland in the mid-seventeenth century was such a time. Tulips had been imported into Holland for forty years before the madness hit. By 1635, a single tulip bulb was swapped for a collection of valuable articles, which included the following:• four tons of wheat• eight tons of rye• a bed• four oxen• eight pigs• a suit of clothes• two caskets of wine• four tonnes of beer• two tons of butter• one thousand pounds of cheese• a silver drinking cup The current value of the above would be $50,000 or more. And this was for a single tulip bulb! Fortunes were made or lost, especially the latter, when the music stopped. Within a few years, a tulip bulb was worth less than a dollar in today’s money. Here is the wonder of collective short-term delusion writ large.
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Humans are a cooperative, if argumentative, race. If you were to be boycotted by your immediate neighbors, if nobody would meet with you or take your instructions or sell you anything or buy anything from you, you could never make money. You cannot do it on your own. Getting rich is mostly sleight of hand, but if you acquire no audience but a mirror, then there is no illusion with which to get rich.
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You cannot get rich all on your own. No one can. You have to create, or work within, the right environment
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In the same way, it is almost impossible to build an individual fortune without colleagues, confederates and one or two professionals on board. You will need a lawyer, sooner or later. You will be a fool to set up in business without a qualified accountant somewhere in the picture. You will need others who believe in your idea or your talent to work with you and for you.
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You just can’t do it on your own. You need to create an environment. This does not mean you require fancy offices and all the accoutrements. Human capital is by far the most important element of your environment, whether you are just starting up or deep into the game. By focusing hard on obtaining that human capital you will vastly increase your chances of becoming rich.
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Stupid people are easy to hire. The world is full of stupid people. Many of them are extremely pleasant and will give you a lovely smile every morning. But such people will not add to your wealth. In the early days, you should avoid them like the bubonic plague. What you need are clever, cunning and adept people.
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But why would clever, cunning and adept people work for a mug like you? Simple. There are many clever, cunning and adept people who are risk-averse. You are not risk-averse because you are dedicated to becoming rich. Believe it or not, much, much cleverer people than you will come and work for you if you ask them.
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You do not need to be clever. You do not even need to be that adept. You need only a little cunning and massive determination to become rich.
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Providing you can pay much cleverer but risk-averse people properly, and promote them and lead them in such a way that they are all rowing in the same direction, they will sign on to your little ship. I can guarantee that this is true because I did exactly that myself.
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Persuading them to join is not the problem, but separating the wheat from the chaff is harder. They look so much alike. This is where you have to focus your energy and concentration. Your employees, your colleagues, your suppliers and your customers are all human capital. Choosing among them is an art form. Yet creating the right environment in which money can be made is essential. I repeat, you can’t do it on your own.
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It takes effort, experience, focus and skill. If you get it right, you will become rich with an ease that will astonish you and everyone who knows you. If you get it wrong, you will be running around like a headless chicken for a year or so and then you will be bankrupt. And you will deserve to be.
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Here are a few discoveries I have made over the years about staying focused when choosing employees or suppliers. 1. Never choose an important employee or a key supplier alone. Get others to interview them or talk to them as well, either with you or separately. We are all far too fond of choosing those we instinctively like, those we respect or believe are similar to ourselves. This is not a good thing. You need the input of others to choose the right candidate, although the final choice, in the early days, must be yours and yours alone.2. Go further than reading a person’s references. It’s such a fag, such a bloody nuisance, such a pain in the neck, to go well beyond the references and CV you’ve received, isn’t it? And yet it pays. Make an appointment with a potential employee’s last company or with a supplier’s other customers. Go and see someone there. Make nicey-nicey. Listen hard. You will discover more about your potential employee or supplier in a few minutes in this way than in hours of conversation with them
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3. Make notes. Speak little. I’m terrible at this. Absolutely terrible. But I’ve learned to try harder as the years have gone by. Your notes need not refer in any way to what the potential employee or supplier is saying. It can be gibberish. Or it can, more usefully, be your impressions of the person and their responses. Have a series of questions handy to shoot out when they grind to a halt. Then focus like mad on what your instinct and your intuition is telling you—as well as your ears.As to speaking little yourself, remember you are being interviewed, too. It is impossible for the other side to tell that you are not as clever as they are if you keep your mouth shut. “Better to have the world suspect you a fool than to open your mouth and put the matter beyond doubt,” as the old saying has it. It may appear rude to have initiated a conversation, as you have, and not to make small talk to fill in embarrassing silences. But you are not conducting the conversation to be polite. You are conducting the conversation to get rich.
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4. Good suppliers respect attention to detail. Don’t hesitate to challenge quotes or invoices—after you have done your homework. At the beginning of a relationship, everything will usually be hunky-dory. Later, hidden or unacceptable costs may creep in. Challenge them. Constantly request quotes from your supplier’s rivals. Demand refunds if a supplier screws up, based not on the cost of the goods or services, but the financial consequences of the screwup.
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5. Pay employees well. Bonus better. Even young children know what you get when you pay peanuts. Monkeys! Your company’s salaries must be competitive.Bonuses should be more than competitive, they should be tempting, generous and based ruthlessly on meritocracy and delivery. That’s the way to get employees to really focus. You don’t want people to apply to work for you because of the salaries on offer—they should be driven by other desires. But if a salary isn’t commensurate with the market, potential winners will not be able to afford to work for you. I made that error for some years before changing my ways.
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6. Be alert for “crossovers.” Many times I have been interviewing someone for a job and realized that they are not suitable for the job in question. However, the candidate would be perfect in another position in my company. Never mind that that position is currently filled. (All positions in your company, except your own, are temporary.)These “crossovers” occur often. Be alert for them. Nothing pleases a candidate who has failed to get a particular job more than being contacted some time later and offered a job out of the blue. It is like a vindication and they will almost certainly say “yes” if the job title and money matches or exceeds their current position.
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7. Only hire winners. There may or may not be such a thing as bad luck. But whether it exists or not, it is certainly contagious! Hire winners or people you believe will become winners. Fire whiners and moaners swiftly. That’s contagious, too. You are trying to create an environment where making money is on everyone’s mind most of the time. Losers and whiners usually have other priorities
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. Ignore your prejudices, likes and dislikes. Easy to say and hard to do. Legally, you may not permit certain prejudices to color your choice regarding any candidate. This is not only good law, it’s good sense. Some of the most successful colleagues and employees who have worked with me and for me over the years were not my personal cup of tea at the beginning.Likes and dislikes should not come into it. Loyalty, effectiveness, honesty, integrity and stamina are crucial. Cleverness and cunning can be useful. Professionalism is vital. A desire to shine in the world is worth more than a university degree. All of this is important. Who you like and don’t like is irrelevant.
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. Promote from within when you can. I recently had to hire a new CEO for one of my companies. An old friend, an ex-CEO and chairman of one of my rivals, Robin Miller, gave me a great piece of advice. He suggested that an external candidate, a candidate from outside the company looking for a senior position, had better be at least 30 percent better than any internal candidates to get the job.Why? Because, he reminded me, you know all the faults of an internal candidate—they may have worked for you for years. But external candidates come to you free from errors made in the past. All you are faced with is an impression at the meeting and a list of their achievements. Failures are not a part of anyone’s CV.
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10. Don’t leave senior employees in any job too long. If this happens, as it has in my companies occasionally, it means you are not focusing on that business. You will get the most out of any senior employee in their first year or two in a new position. After that, they enter a “comfort zone.”Do you really want them to be comfortable? If a man or woman heads up one of your companies and has been there too long, consider asking them to create a new division or company for you. But do not leave them to quietly go to seed—they will get bored and resign anyway, if they’re any good.
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If on my deathbed I had only a very short time to pass on what wisdom I have accumalted about getting rich to a son or daughter, then it would be this:Ownership Shall Be Half of the Law; Doing an Outstanding Job Shall Be the Other Half. There is no point in owning 100 percent of a rubbish company. Whatever it is you intend to do to get rich, get good at it. Hire people who are better than you at it. Listen and learn and get better still at it. Even if you produce garbage for morons to watch on television, make it the most entertaining garbage out there. Even if you are nothing but a scum-sucking, ambulance-chasing tort lawyer—the lowest form of pond-life that walks on its hind legs—be the best scum-sucking ambulance-chaser in town.
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The American gangster Al Capone is said to have shot a man who kept brewing rotten beer for Capone’s illegal beer-distribution racket during Prohibition. His gang lieutenants didn’t get it. The business was illegal anyway. If a new supplier tried to muscle in with better beer, they would murder him. What did it matter if the beer was crap? But Capone, who would have become one of America’s greatest businessmen if he had stayed on the straight and narrow, knew better. He knew that rotten beer makes rotten business. He refused to have his name associated with rubbish. He expected Prohibition to be lifted eventually, and hoped to be the legal beer king of America. Of course, he never did because he didn’t pay his taxes and because he was a murderer and a vicious, brutal killer.
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Why does it count? Why is it important to focus on doing an outstanding job? Firstly, talent will flock to your company. Talented employees mean you have more opportunities to make more money. Secondly, you will make fewer errors. The quality of your management will see to that. Thirdly, it places a premium on your assets and the worth of your business. That means you get richer faster. Fourthly, it’s simply more enjoyable—which means you will enjoy coming to work and will spend more time focusing on doing an even better job. So focus on your business, whatever it is. It represents what you are. It should be a source of pride as well as a source of money. Being the best, or at least striving to be, will speed up the process of getting rich. Trust me. I’m the best damn magazine publisher in England. (Well, at least I strive to be!) Focusing on doing an outstanding job is an important part of getting rich.
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I do not believe the words “a patient man” would necessarily spring to the lips of those who know me superficially. “Irascible” would be more likely. But I can be as patient as the next man, and a great deal more so, when it comes to projects I believe will make me money.
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Past failures are not pleasant to contemplate. But if you intend becoming wealthy by owning a company or some similar entity, then, sooner or later, you will encounter failure. It would be wise, at that time, to figure out just what went wrong.
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how can you know when things are going to fail? You cannot. Nobody has 20/20 future vision. But if you are running the business, you will certainly know much earlier than anyone else, providing you are willing to stare reality in the face, that is, which many executives and entrepreneurs are not.
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Books on management theory at this point normally advise you not to panic. I don’t agree with that. It’s my belief that adrenaline and a touch of panic are tremendous motivators. Of course, you can’t stay in a panic, but a dose of panic in a private place, with a bottle of malt whisky on one hand and a bean-counter on the other, can be a very motivational experience. Motivational and salutary.
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But never despair. We are not engaged upon a serious business here. We are only talking about the getting of money, and, occasionally, the losing of money. You may despair when you have broken your neck; you may despair when your only child has predeceased you; you may despair when terrible wars, famines or plagues afflict millions of innocents. But you must not despair over a simple thing like money.
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look at your own, ailing beast. Can it be something else? Can you make it a tiger of a different stripe, or can somebody else? Is it really not a valid business? Would more capital help, or would that be throwing good money after bad? Your analysis must be ruthless. If there is anyone with business savvy in the world you trust, now is the time to seek them out, tell your story and listen. Should you determine that the beast is worthless, both to you or anybody else, still do not give up. At least try to sell it.
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figured out your business isn’t viable. You’ve tried to look at the beast another way. No joy there. You’ve made some humiliating telephone calls and paid some visits and tried to sell it or even give it away. No interest. What now? Of course, you can try cutting costs to the bone. But that is of little use if there are insufficient costs to cut. And firing people is never much fun. And if “downsizing” and cutting costs won’t do the trick, what then? You’ll have to close the business. Be careful not to continue ordering goods or services you know you will not be able to pay for. That’s not just ethically wrong, it’s legally wrong and you can get into serious trouble if you do it. If necessary, you might have to declare bankruptcy
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The more honest you are about your misfortune with those affected by it, the easier the comeback will be. There is going to be a comeback, isn’t there? But the more you weasel and fib or tell outright lies or blame somebody else, the less likely it is that anyone will want to do business with you again.
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Some people seem to think that out of sight is out of mind. That if they cheat you and a few months or years go by, you will forgive them, or, better still, forget about them. But we don’t forget and forgive people who weasel.
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Screwing up isn’t criminal or deliberate or malevolent. But covering up is, if you get caught. And you will get caught—
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As for becoming a tax exile (leaving a country to avoid paying tax by exploiting loopholes in the law), I tried it once, twenty-odd years ago. It may work for some people, but I found it tiresome, oddly disturbing and counterproductive. (Mind you, the capital gains tax in those days was astronomical—something like 80 or 90 per cent, so it was understandable that many of us were on the same Concorde flight on 3 April 1983! You see? The date is engraved on my soul. Exile of any sort is never pleasant and rarely worth the bother.)
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my advice is to keep it simple, and to hire competent tax advisors just as soon as you begin earning money over and above your salary.
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So what is your fortress? It is your inner core, your integrity, your belief in the worth of others and the love of those dear to you. Not to mention your own worth. It arises from belief in yourself. And, for a few, from a belief in their own destiny. Excessive idolatry of money will “take” all those. It will corrode both self-belief and love. It will stretch integrity on the rack. It will “take” the fortress; and it will not be a pretty sight. Seeking substantial wealth is almost always a fool’s game. The statistics show that very few people ever succeed. Most of them should never have made the attempt in the first place. They aren’t suited to it, and if that sounds defeatist, then consider the fact that the search will take up a great deal of your waking life for many, many years. You cannot get rich without “wasting” that time. Not unless you were born lucky—so lucky that luck has squatted on your shoulder virtually from birth. You would not need to get rich, then. You would already be rich, in one way or another.
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Money is never owned. It is only in your custody for a while.
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And yet you wish to waste your youth in the getting of money? Really? Think hard, my young cub, think hard and think long before you embark on such a quest. The time spent attempting to acquire wealth will mount up and cannot be reclaimed, whether you succeed or whether you fail. Even should you succeed in becoming rich, unlikely as that is, what will you have achieved? Independence of a kind? The luxury to choose what you wish to do with the rest of your life? Happiness? No, no and no. You will not achieve any of those things. Not when you have too much money.
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Wealth makes many demands and, by the time you have acquired it, you will be prey to certain habits. You will fear to lose it and must spend a great deal more time to defend it. No one is “independent” of the human race.
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No luxury of choices for rich little you. You will be too busy keeping the sea from washing away the sand you have spent so long collecting at such terrible cost to your health and your sanity and your relationships with others. It is always thus. There is no escape. You believe (I know you do) that it will be different for you. But it won’t be. It never is.
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Happiness? Do not make me laugh. The rich are not happy. I have yet to meet a single really rich happy man or woman—and I have met many rich people. The demands from others to share their wealth become so tiresome, and so insistent, they nearly always decide they must insulate themselves. Insulation breeds paranoia and arrogance. And loneliness. And rage that you have only so many years left to enjoy rolling in the sand you have piled up. The only people the self-made rich can trust are those who knew them before they became wealthy. For many newly rich people, the world becomes a smaller, less generous and darker place. It sounds ridiculous, doesn’t it? Ridiculous and gloomy.
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you are to consider that I have been very poor and I am now very rich. I am an optimist by nature. And I have the ability to write poetry and create the forest I am busy planting. Am I happy? No. Or, at least, only occasionally, when I am walking in the woods alone, or deeply ensconced in composing a difficult piece of verse, or sitting quietly with old friends over a bottle of wine. Or feeding a stray cat. I could do all those things without wealth. So why do I not give it all away? Because I worked too hard for it. Because I am tainted by it. Because I am afraid to. All those reasons and more. Perhaps, if I am lucky enough to become old, I will accumulate something else: the courage to give it all away before I die. That would be a good thing, I think.
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But you must make your own choice. I have said my piece and I meant every word of it. This small part of my book was composed in my mind years ago. It was easy to write. I knew all of it before my fingers touched the keyboard. It has troubled me for years and I thank you for allowing me to share it.
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I suspect it will have little effect on you, though. You are probably young and are tired of being poor. And tired, from years of growing up and schooling, of being lectured. Very well. Let us return to a recap of the “important bits” to help you on your journey. But just before we do, can I ask you to do me a small favor? Please lodge one fact in your memory: that the last one thousand five hundred words was an “important bit.” In my heart of hearts, I know it was the most important bit you will read in this book.
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I am suggesting that you must cut loose, in your mind, from your previous life. Getting rich comes from an attitude of mind. It isn’t going to happen if things drift on pretty much the way they are right now. Cutting loose can be painful. I have heard of very few men or women who made a ton of money who did not leave, or divorce, their wives or husbands or lovers sooner or later. Or who were not estranged from family members, often their children. It comes with the territory. Even if you hand over large sums as a gift to those you had to cut loose from to get it, they will never really forgive you. It isn’t the money, you see. It is because you have humiliated them, in their minds anyway, both by succeeding and by valuing the time it took for you to succeed over their part in your life. And that, in a nutshell, is why it is so important to cut loose, especially in the early days. Focus, determination and relentless drive are wearing in themselves—both to you and those around you. Any distraction whatever can cost you a chance that may not come again. And, for the purposes of this book, family, lovers and friends are distractions, plain and simple. There are exceptions, of course, and perhaps you will be one of them. But don’t count on it. Chances are that you will have to cut loose from your old life in more ways than you imagine and that the breach will never really be healed.
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Lastly, it goes without saying that you must cut loose from working for other people. If you have been gainfully employed since you left school or college, this is an oddly difficult thing to do.
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you must leave the safety of the ant colony and the hive. You are to become a loner, an outcast, cut off from the very thing that defines what many of us believe we are. What is the first question usually asked by strangers of each other? Right, it’s “What do you do?” In some cultures, the way of answering may be different; but it nearly always relates to work in the West: “I’m a teacher; I’m in banking; I’m a dairy farmer; I’m an HR administrator; I’m a sound engineer.” Our job defines us. But it cannot define you. Not anymore. You are a wild pig rooting for truffles. You are a weasel about to rip the throat out of a rabbit. You are an entrepreneur. You are going to be rich, and you don’t much care, within the law, how you are going to do it.
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If you are not just reading this book for a bit of entertainment (nothing wrong with that), and if you seriously do wish to get rich, then I am going to ask you to memorize the words below, close the book and repeat the words again to yourself. Let’s go: THE WORLD IS FULL OF MONEY. SOME OF IT HAS MY NAME ON IT. ALL I HAVE TO DO IS COLLECT IT. Done that? OK, now we’re rockin’ and rollin’. The first question to answer is where is the goddamn money? Let’s imagine it is in a mine in a mountain. Fine. Which mountain? The mountain that is already making a lot of other people rich would be a good bet. Gold rushes don’t happen in old mines. There will be people making a good living out of old mines, but they won’t be too keen to let you muscle in on their stake. Look for new mountains where gold is being mined; or will be mined soon. Let us speak plainly. This is not the time to begin a chain of car dealerships. Car dealerships are great, but it’s an old mine. Don’t go there unless you have a brand-new angle. Making and distributing beer is an old mine. Unless you have a new angle (like “real ale”), then that’s a mountain to avoid. Of course, if you’re really imaginative, you can often come up with such an angle.
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In St. Vincent and the Grenadines, a small country of which I am a proud citizen, there is a beer company. They make a good beer called Hairoun. I expect the company makes decent money even though the entire country only has 120,000 citizens. Could I muscle in on this market? Yes. How? I would invent a new beer. I would print a number inside each bottle cap. I would set up a lottery, with the agreement of the government. There would be a draw once a month. Whoever produced the beer cap with the winning number would win a substantial cash prize. Fifty percent of the lottery money would go to the winner. Ten percent would go to the government. Forty percent would go to good causes—children in need, orphans, education, that kind of thing. I would then launch my beer with the kind of advertising blitz that St. Vincent and the Grenadines has never (mercifully) seen. I would make television commercials where a bartender asks a good-looking Vincentian man if he wants another beer. “Sure,” he’ll reply. “I’ll have one for the widows and orphans.” Big grin. Frothy beer slapped on the counter. Logos for the beer explode on screen surrounded by falling money. My beer would wipe the floor with Hairoun. (Hey! this is a hypothetical example we’re exploring here.) Everybody wants to get rich. Once a month people smiling and holding a big check would appear on television advertising my beer. I would begin exporting the beer to other islands and doing the same trick there. What would I call my beer? Let’s see: the slang for a Vincentian citizen is “Vincy.” That’s it! I’ll call it Vincy Beer. The slogan will be: “One for the Widows and Orphans.” Or: “The Beer for Winners.” (OK, OK, I’m not as good at making up marketing slogans as I am at brewing beer.) So why have I told you this, and thereby warned the brewers and distributors of Hairoun of my evil intentions concerning my (truly) great idea? Easy. Because I have about a hundred good ideas every day. Ideas are ten a penny. And because I have no intention of going into the beer business. (Or is that a double bluff?) You see, you have to choose a new mine where you suspect there is money, or an old mine with a different angle to get rich. The right mountain. A great new mine right now is in telecommunications, or the Internet, or legalized gambling. Property is always good. (You can start small in property and you can get lucky quickly. It’s a crowded market, though, for that very reason.)
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Avoid that trap. Don’t do anything because you feel you have to. Go for what attracts you. Go for something that exploits your natural talents. Go to the mountain which produces money. Money that has your name on it.
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Fear nothing. Another easy-to-say and impossible piece of advice. Tough luck, chum. Life’s a bitch and then you die. Get used to it. It isn’t going to change anytime soon. What is there to fear? Everything and nothing. Try looking at it through my eyes. I am an insignificant little worm on an insignificant planet which circles an insignificant star in a big (presumably) bad universe. A universe I will never comprehend, nor can ever hope to comprehend. Just like everything that walks, breathes, grows, flies, crawls or swims, I am going to die. One day, my planet will die. Long, long after, the sun it still circles as a dead rock will die. Then there will be darkness on the face of the earth. That is, there would be darkness if there was any creature alive to view it.
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Armies and governments fear men or women who know they are going to die soon; and they have good reason to. Such people have nothing to lose. They will commit any atrocity and take as many others with them as they can, if they are driven to it. You must now become that doomed man or woman. You are going to die. Nothing can alter the fact. It is immutable. Incomprehensible. Unfair. All those things. But it sets you free, don’t you see? It sets you free.
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What does anything matter if you are going to die? Nothing matters. Nothing at all. Get that through your terrified mind and you will wake up in the morning ready to rip the throat out of the first gazelle unfortunate enough to cross your path. Why would you rip its throat out? Because you can. Not for breakfast. Not for the “thrill of the chase.” But because you can. If you want to be rich you must make a pact with yourself about fear of anything. You cannot banish fear, but you can face it down, stomp on it, crush it, bury it, padlock it into the deepest recesses of your heart and soul and leave it there to rot.
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Just try. Try for just a single day, a whole day when you refuse to acknowledge fear of failure, fear of making yourself look like an idiot, fear of losing your lover, fear of losing your job, fear of your boss, fear of anything and of any kind. Fear will creep back, usually at three in the morning. Laugh at it and tell it to take a hike. Smash it in the teeth. Spit on it. Put your arms around it and make nicey-nicey. Then slip a sharp blade into its stinking throat just as you’re French-kissing it. Go on. I dare you. If you can do it, this will transform your life. Not for the better. I didn’t promise you that. But you will instantly perceive (among many other things) just how much money there is in the world and how pitifully easy it is to obtain it. Money that already has your name on it.
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All that is stopping you is fear. I do not know of what kind. It may even be fear of succeeding. But if you want to be rich, gentle reader, and if you can read these words, then all that is stopping you is fear of one kind or another. You have no one to blame but yourself. The world is full of gazelles with diamonds in their guts.
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That is what getting rich is going to be like. You will become a predator. A killer. You will cease to be prey. You will not succumb to fear. Others will fear you. Especially gazelles bearing diamonds. This will make no difference to an insignificant worm on an insignificant planet circling an insignificant star. No difference whatever. Nothing can hold back the coming dark. Nothing can alter the fact that you will cease one day to breathe and think
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Much of what I have written in this book may be wrong. Misguided. “Tosh” as we used to say in my school playground. I accept that. I am far from infallible on the subject of getting rich. But this last short essay concerning fear and its influence is, I think, wholly true. It is fear that rules us. Love and respect and other such emotions make it bearable, at a price. But fear rules us all, and always has. Which is odd. Because what can there be for us to fear, when each of us knows we shall die eventually? Is it a definition of sentiency?
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be rich, if that is still your desire, you must somehow learn to harness fear to your own advantage. Is that what I have done in my own life? Was all that rage and fierceness and drive and stamina rooted in my own fear? Have I used fear as a fuel in the getting of money? Perhaps I have, although I never thought of it that way before. In any case, I’m not certain I want to know. I have never trusted armchair psychiatry. But I do know that you must make an accommodation with your fears if you are to succeed. At least, I know that to be true in my own case
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You have less time than you think. We all do. Why then are you waiting to fulfill your perfectly legitimate, if foolish, desire? If you do not start today, then when will you start? Tomorrow? Next year? The year after? You will never start unless you start NOW! That’s right. Right now. Even as your eyes scan this page, your brain should be plotting and planning ideas and possibilities, weaving a web to ensnare what you could achieve, if only you will cease this endless prevarication and commit yourself.
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Commit yourself heart and soul, mind. Heart and soul. No half measures or lukewarm approach is likely to succeed
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Your quest is mad. What use to muddy the waters with logic and statistics—bugaboos that will only serve to discourage you from taking the plunge?
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When opportunities come you must pounce. Whether you are just starting out or have been at it for a long while. If an opportunity should arrive just as you are taking your family on vacation, for example, do not weaken. Let the family go on without you or cancel the trip altogether. I can tell you a true story of a man who lost millions and millions of pounds that were his for the taking because he went on vacation.
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The magazine that generated my first huge pile twenty-five years ago fell to me when the managing director of a large rival suspended negotiations with the founder of the magazine while he went abroad. He probably figured the deal was nearly done and the seller could cool his heels for a week or two. It wasn’t important enough for him to change his travel plans. Naturally enough, this angered the young man attempting to sell his prized asset. It was disrespectful. By the time that managing director returned from abroad, a majority interest in the magazine was mine, signed, sealed and delivered to Dennis Publishing.
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You may have many reasons for caution and proceeding carefully. There always are such reasons. They creep about a fearful mind like Tolkien’s Gollum, wearing spirit to a shadow and sapping optimism with dread. Cast them out, these “reasons.” They are nothing. They are sprites and fancies of your imagination that will vanish if you so much as say boo! to their lickspittle goose. If you wish to get rich, there are no reasons why you should not get rich. None at all.
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For they are not “reasons”; they are excuses. For the most part they are pitiful alibis, half truths and self-serving evasions you have erected to spare yourself from the quiet terror of taking your own financial life in your hands and making your dreams concrete reality. They are the children of fear and the parents of a thousand “if onlys.”
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It may well be true, should you succeed, that you will discover you are not as happy as you once believed wealth might make you. But is that a reason for not beginning? Perhaps I will be proved wrong and you will become rich and as happy as a lark in spring. Who knows? You will never find out if you do not try, and if you do not begin trying now.
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The only three valid reasons for not attempting to become rich are: “I do not wish to be rich.” Or, “I wish to be rich but I have other priorities.” Or, “I am too stupid to try to get rich.” These are valid reasons, especially the last. As for the second, what kind of a world would we live in if Vincent van Gogh had never painted, if Beethoven had had no time to compose symphonies
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And what of your family? Ah, yes; what kind of a childhood would you have had if your mother and father had abandoned you to a wet, dark cot while they scrabbled day and night to become wealthy? So, yes, there are valid reasons. But not many of us can lay claim to them. Most of us are ordinary Joes. We will never compose a symphony or invent the modern submarine. And a great many of us will not have children. Which leads me to what, I suspect, will prove a controversial take on the subject of having children and getting rich. No one who has not had a child can know the depths of anguish and joy that parents endure. I accept that as a childless man. But so often, children are used as a bogus trump card in any debate on the central theme of this book. “It’s OK for you, but I have responsibilities. My family comes first.” Yes, yes, yes. I am sure you feel better having got that off your chest. But how much real truth is there in it?
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It is my belief that children do not care if parents are rich or poor, providing there is enough money for basic essentials like food, clothing and shelter. What they care about is unconditional love. That is the only key, the only true priority, although they neither know it, nor say so, after five or six years old.
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my mother’s career began to flourish and our lives changed. We became “middle class” overnight. I got a bike. There was a smart bathroom in our new garden flat with a modern bath and hot water pouring out of the tap. The lavatory paper came in soft, comfy rolls. We were allowed pets and we had a lawn with a big tree to play cowboys and Indians in. Was I a mite happier? I don’t believe so. I had a wonderful time in my grandparents’ house. All the other kids in the alley there were in the same boat. We didn’t even know we were poor. Material surroundings are of far more importance to adults than to children.
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Logically, then, the excuse “I have got responsibilities” can only refer in most cases to the unconditional love part. Young children neither know nor care if their mommy and daddy are rich. It doesn’t enter into the equation. But the unconditional love part, and especially its expression, are central to any child’s well-being.
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Writing this book, I mean. It’s taken me nearly eight weeks. But I have to get back to work now—planting trees, writing poetry, making money. That sort of thing.
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I’m no great prose writer (and no great philosopher, either) but I’ve read a lot and lived a lot and made a lot and spent a lot—and played the fool with it all to a highly satisfactory degree
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Hundreds of millions of dollars have “trickled down” (to use Margaret Thatcher’s much-mocked, much-used phrase) from my leaky fingers into the general economy and the outstretched hands of various trades and professions and charities. Wine and narcotic suppliers did exceptionally well out of me over the years. So did real-estate agents, booksellers, young ladies of easy virtue and upmarket British car manufacturers. I spent a hell of a lot of what I made on sex and drugs and rock ’n’ roll. The rest—as the footballer Georgie Best joked just before he died recently—I wasted. It’s the usual old story. But whores have to make a living and so do purveyors of French wine and single malt whisky.
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By my reckoning, I have bought £790,000 worth of French wine over the last twenty years
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Who else have I “trickled down” my dosh to? Thousands of people have earned their living working at companies I founded or cofounded and hundreds still continue to do so. Printers and paper manufacturers, of course—but that’s a cost of doing business and doesn’t really count. Lawyers—they always do well. Accountants, and tax advisors, naturally. Charities have done very nicely. Farmers have sold me thousands and thousands of acres of land they no longer needed. And banks have made a pretty penny from yours truly over the years. And art dealers. And Persian rug dealers. And architects. And restaurant owners. Oh, and the taxman. How could I forget him? One year I paid £10 million to the UK tax authorities
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Making a lot of money is like piloting a ship. You cease to be a person to many others. You become, instead, a freighter loaded to the gills with ingots. They want some of that gold and they will go to any ends to get it, the worst of them.
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So did I learn anything? Anything you might find useful when you become rich yourself? Yes, I did. Here are a few truths I discovered the hard way, some of them concerned with the immediate aftermath of getting rich, and some concerned with staying rich, not to mention relatively sane
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• Keep giving it away. The faster you give it away, the more money will flow back to you. Not because of “karma” or “universal cosmic forces,” but because you then spend less time defending it and more time making more of it. Investing in private companies you think can do well is another sensible ruse for staying rich, but giving it away on a continual basis is a surer route. By the way, when you do start giving it away, find someone to do it for you. Most of my money is given away by a lovely lady accountant called Catherine Bishop, and she does a far better job of it than I.
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• As soon as you’ve spent it, gifted it, loaned it or invested it, forget it. More angst and worry comes into the world from concern over past investments, loans or gifts than can be imagined. It’s gone. Forget it. If any of it returns to you, fine. But that should not be your primary concern, unless you invested for safety’s sake. Which is a different matter. All you did with that type of “investment” was take a punt or make a gift. Do not waste time playing the “blame game” over investments, loans or outright gifts, however large. The blame, if there is any, is yours.
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• Never loan it to friends. If you loan money to a friend, you will lose your friend as well as your money. Give them whatever you feel like giving. Then forget it. Ditto with relatives. If you diligently follow this one piece of advice, you will be saved a sackful of misery
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• Get “first flush” barminess out of your system as fast as possible. You’re going to do it if you get rich. Yes, you are. You are going to buy a sodding great big house, then more houses abroad, then servants by any other name, then you are going to start misbehaving. Gambling. Credit-card abuse. Expensive clothes. Whores. Drugs. Drink. Fast cars. Private jets. Big parties. Interior designers. Gold taps. The lot. This probably can’t be avoided. But the sooner you can work through this “barmy” phase, the better your health will stand up, and the sooner you will get your second wind.
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• Your oldest friends are your only friends. Sad. Very sad. But true. And not all those old friends will be comfortable with the new disparity in wealth between you and them. You’ll have to wait and see which. And, surprisingly, you will have to work on those friendships for quite a while. They’re important to you, believe me. Only your old, trusted mates can tell you when to get off. Will dare tell you that you’re out of order
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• Get used to being “cut off.” I do not carry a mobile phone or any communications device on my person. At least, not one anyone knows anything about. No one has my e-mail address, because I refuse to register one. I never will. I am very hard to reach and that’s deliberate. Only a very few trusted aides, business associates and my lover can reach me day or night. And sometimes, not even then. If you do not begin to isolate yourself pronto when you get rich, then you will be driven mad pretty swiftly. At least that’s my experience. It isn’t that you have changed so much, (although believe me, you have), it is simply that you are now a loaded galleon, a supertanker, and all the pirates have lookouts. There just isn’t enough time in the world to deal with them all. Avoid them instead.
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• Develop a passion outside of making money. Fast. If I had made the time earlier to discover that I could write poetry that thousands of people would be kind enough to purchase and enjoy, I would have saved myself many torments of the pit. People who can make money are often easily bored. That is true of me. So when the day’s work was finally done, I used to make my own entertainment. There’s nothing intrinsically wrong with orgies, parties, narcotics and booze—but they will kill you in the end. If I had spent the thousands of nights writing poetry that I spent playing the fool to keep boredom at bay, I would be a happier, healthier man today. And a better poet to boot!
How to Get Rich
• Get your own private advisors. The professionals who help run your company must be first class. The professionals who run your private wealth for you must be even classier. There is no substitute for a first-class lawyer, tax advisor, accountant, auditor, estate manager and business advisor. None. You will get into a ton of trouble if you don’t search them out, appoint them, and make your peace with them at the earliest opportunity. Avoid the errors I made in my first few years of being rich. Do this earlier than you think is necessary. You’ll understand why later
How to Get Rich
• Do not try to be friends with your staff. When you are worth several hundred or a thousand times what a member of your staff is worth financially (do the math), then trying to be friends with them or encouraging them to be friends with you is silly. They know it’s phony and you know it’s phony, and they know that you know. Not being friends comes with the territory. Being fair and friendly is always cool. Trying to be “one of the boys” is pathetic.
How to Get Rich
• Do not sleep with your staff. It’s dumb. It’s unfair. And it sucks. Period.
How to Get Rich
• Choose personal aides with enormous care. You may spend more time with your PA, your chauffeur or your business manager than with your husband, wife or lover. Or even, sadly, than with your children. If a personal aide is not working out, then fire him or her just as soon as you know. But be very generous when you do so. Tell them it’s your fault—it probably is. Close aides like these can become your friends, and usually do, over time. That’s understandable. But try to keep a little distance “just in case.” Ensure they are employed under a very different contract than employees of your company. They must work for you, not your company.
How to Get Rich
• Be safe. If you make a lot of money, then it’s foolish not to look to your security. Even speaking to “security advisors” is weird—you feel like a fraud or a B-movie actor. Get over that. Quickly. No need to get paranoid about it, but effective security for you and your family has to become a priority. If you get rich enough, you will end up with your own security force, as I have. It’s a pain, and I still feel like a fraud, but the alternative isn’t worth contemplating.
How to Get Rich
• Never stop looking for talent and promoting talent. This single suggestion will keep anyone rich. Talent is all most companies consist of. Talented people are crucial to keeping your company humming right along and growing. As the owner, you have the right to seek out talent, both inside and outside of your company. You have the right to insist it is promoted or hired. Make use of that last right. If you get known for making use of it, the talent will start coming to you
How to Get Rich
• No deal is a “must-do” deal. It’s easy to get carried away when you are in pursuit of a sweet deal. But more entrepreneurs get themselves in trouble by overreaching than exercising discipline. No deal is a total make-or-break deal. Not one. If you cannot get the terms you know make sense, then walk away
How to Get Rich
• Lead. Do not be led. You have employed a bunch of talented boys and girls who are smarter than you. Great. But you are their leader. If you sniff an opportunity, then get them to consider it. If they prevaricate, call a meeting and brainstorm. If they still won’t get excited, then take the project into your private office or somewhere else and begin it there. Do not leave the opportunity within the company to be sabotaged, focus-grouped and committeed to death—which is almost certainly what will happen to it. Your employees and advisors are just that: employees and advisors. You are the owner. You must follow your instincts. You must lead.
How to Get Rich
• Stay as healthy as you can. I have no advice to offer on this subject—and no right to offer any. I’m rich, not a hypocrite. But staying healthy long enough to enjoy your wealth must make some kind of sense
How to Get Rich
• If you’re bored with a business, sell it. You will not be able to disguise your lack of passion for a business if you fall out of love with it. Your lack of enthusiasm leaks out of you and infects those around you. They can sense it and they will find it hard to forgive and easy to emulate. Sell that particular business pronto. Then go and invest in something that doesn’t bore you.
How to Get Rich
• Try to sell before you have to. You’re an entrepreneur. Your companies are not your “babies,” they are tools for acquiring wealth. Try to sell them before they peak. Buyers require what is called “blue sky” (further growth) to get excited and offer a great price.
How to Get Rich
• Retirement will kill you. It’s official! Retirement kills the kind of people who make their own pile. I do know one couple, old friends called Don and Sue, who squirreled away a million bucks or two (plus a house) and travel quite happily, and very modestly, for most of the year. They go to India and Indonesia and other such places. Or else stay with friends, like me. They love their life, and are content to live on the interest from their investments. But they are the only ones I know who ever really retired contented. Interestingly, Don always predicted he would retire early; long before he made any money. Still, for most men and women who have made a lot of money, retirement is usually a living death sentence
How to Get Rich
• Remember you are only richer than them. Not smarter than them
How to Get Rich
Believe in your own bullshit and grow steadily poorer, or listen to the people you employ and get richer and richer. I tried it the first way in the early days. When that didn’t work, I got sensible and started a policy of deliberately employing men and women who were smarter than I was—and listening to them. It works every time.
How to Get Rich
The trick to staying rich is balance. I guess Lao Tsu, or whoever it was wrote the Tao Te Ching back in the sixth century BC, would say that all of life, all of existence, is about balance. By seeking to make oneself richer than one’s neighbor, that balance is destroyed. And maybe Lao Tsu was right.
How to Get Rich
I was put on this earth to get rich. To collect money that already had my name on it. And then to give it all away. Now there’s balance for you! Stay rich!
How to Get Rich
Looking for the “secret” to getting rich is not a sensible exercise. If there are such secrets, then I have never discovered them. But, as humans love lists and “secrets,” here is my best shot at a very short list. A kind of “secret” recap. The essence, if you will, of what I have learned along the way
How to Get Rich
The Eight Secrets to Getting Rich 1. Analyze your need. Desire is insufficient. Compulsion is mandatory.2. Cut loose from negative influences. Never give in. Stay the course.3. Ignore “great ideas.” Concentrate on great execution.4. Focus. Keep your eye on the ball marked “The Money is Here.”5. Hire talent smarter than you. Delegate. Share the annual pie.6. Ownership is the real “secret.” Hold on to every percentage point you can.7. Sell before you need to, or when bored. Empty your mind when negotiating.8. Fear nothing and no one. Get rich. Remember to give it all away.
How to Get Rich
So that’s it. That’s how I got rich and how you can, too. If you want to. I won’t blame you if you don’t. Far from it. There are far more important things in life than money. (Spoken like the rich, hypocritical beastie you are, Dennis!)
How to Get Rich
Systems tend to malfunction just after their greatest triumph. [We all] have a strong tendency to apply a previously successful strategy to the new challenge
How to Get Rich
Good luck on your quest if you decide to undertake it. And remember the words of Benjamin Jowett: “Never retreat. Never explain. Get it done and let them howl.” The first step? Just do it And bluff your way through it. Remember to duck! Godspeed … and Good Luck!
How to Get Rich
“Seems a bit silly to write a whole book about one observation, though. He’s talking about intuition, although he won’t use the word. What did you think, Felix?” I told him I thought it was bunkum. Snake oil. Just like every other so-called self-help book I ever stumbled away from at an airport bookstall. “What the world needs,” I thundered, “is an anti-self -help book. A book that tells people how hard it is to be a great manager or a great anything. About how hard it is to get rich. Bugger the glib insights!” “They’d never buy it,” my friend smiled. “People buy dreams, they don’t buy reality. They want it made easy. They want a promise a fool could keep.” “We’ll see,” I growled, an idea forming in my mind. “Not one of those books was written by anyone who actually got rich
How to Get Rich
So here we are with How to Get Rich. I want to thank Gail Rebuck, the boss of Random House UK, who invited me into her beautiful London home and locked me up in a cupboard until I agreed to write it
How to Get Rich
Suzen Murakoshi gently reminded me, as she always does, to be kind but ruthlessly honest in my book; otherwise there would be no point in it.
How to Get Rich
I am grateful to Caroline Rush, my personal assistant, who shepherded the whole project through its various incarnations. As I am to my other assistants, Wendy, Amy, Sharon, Michael and Toby, for keeping the world at bay while I wrote and wrote. Not to mention the guys and girls who run my companies while I do such crazy things: Alistair Ramsay, Brett Reynolds, Stephen Colvin, John Lagana, James Tye, Justin Smith and Steven Kotok.
How to Get Rich
As to my longtime partners, Peter and Bob, they are the real heroes of this book. Because, in truth, they helped me make most of my money. The pair of them have never let me down. Not once in thirty years
How to Get Rich
Making money might be important, but so is getting away from it all. St. Vincent and the Grenadines is the least spoiled group of islands in the whole of the Caribbean. They are stunningly, heartbreakingly beautiful. My advice to you, gentle reader, is to come here and visit the rain forest, the volcano, the waterfalls, the empty, sun-kissed beaches and the quiet bays and keys. You will find a smiling face around each corner and a green flash in every sunset. This is as close to paradise as it gets. And you don’t have to be that rich to come join us!