My personal travel schedule has been stretched to its limits, with an average of three countries and five events each week. The stories I am hearing and connections I am seeing within this environment continue to flourish, and this is what energizes me each day. Creating and nurturing these ‘conditions for success’ is the subject of the story below…
WEALTH BY CHANCE
Last month I met an enthusiastic graduate from one of the many Entrepreneurship MBA programs currently on offer. As if by way of introduction, he asked “What’s your exit strategy?”
“What’s your exit strategy? What’s your plan?”
I asked him if he could name any famous billionaire who had made all his wealth by setting a plan with an exit strategy, executing the plan, and then exiting. He couldn’t. Now I’m not saying exit strategies are not useful. The first thing you’re told when you get on a plane is where the exits are. But exit strategies are for the passengers, not for the pilots. The last thing you want to hear when you get on a plane is that the pilot will be bailing out at 30,000 ft. The last thing you want to hear if you’re investing in Microsoft is that Bill will be bailing out once the stock price hits $40.
It’s not a coincidence that all the World’s wealthiest entrepreneurs continue to work long after they need to. They don’t see it as work, so there’s nothing to retire from. If retiring means giving up work to do what you enjoy, Warren Buffet retired the moment he started investing. Pilots don’t exit. They’re too busy having fun flying.
What about the plan? Did Richard Branson have a plan to get into airlines when he started Virgin Music? Did Steve Jobs have a plan to revolutionize the music industry when he started Apple? To the surprise of the graduate, we found time and again that great entrepreneurs made their millions by luck.
” I may not have gone where I intended to go, but I think I have ended up where I intended to be.” – Douglas Adams
“What? Wealth is just an accident?” Wealth isn’t an accident if being lucky is part of the plan. Or in the words of Shirley Temple: “Luck needs no explanation”. Great entrepreneurs don’t start with a plan. They start with a passion. From there, the experiment begins.
Sam Walton fell into retailing at 21 because his family’s neighbour happened to be a retailer with 60 variety stores. Hugh Mattingly became one of Walton’s first mentors, showing him the trade and offering him a job. So did Walton have a plan? “I don’t know about that kind of stuff. But I know this for sure: I loved retail from the very beginning, and I love it today.” So was the success formula of a Wal-mart in every town by chance? No, it was by necessity. As Walton was getting ready to start his first store, his wife Helen said “I’ll go with you any place you want so long as you don’t ask me to live in a big city. Ten thousand people is enough for me.”
“Everything existing in the universe is the fruit of chance and necessity.” – Democritus (460BC)
A friend of Walton’s, Tom Bates, worked for a retail franchiser, Butler Brothers. So Walton asked Tom what he’d have that suited a small town, and at the age of 27 got started with a Butler Brothers franchise in Newport, Arkansas. By chance it was right across the street from a very successful competitor, John Dunham. “It was a real blessing for me to be so green and ignorant, because it was from that experience that I learned a lesson which has stuck with me all through the years: you can learn from everybody. I didn’t just learn from reading every retail publication I could get my hands on, I probably learned the most from studying what John Dunham was doing across the street.”
Then came the billion dollar piece of bad luck. Not because it cost a billion, but it led to a billion. “In all my excitement at becoming Sam Walton, Merchant, I had neglected to include a clause in my lease which gave me an option to renew after the first five years”. Seeing the success of the store, the landlord chose not to renew the lease and forced the sale of the outlet from Walton to the landlord’s son. With no other viable location in Newport, Walton loaded his family and belongings in a truck and started driving. They didn’t stop until they came to a small town, Bentonville, population 3,000. There, at the age of 32, he started Walton’s Five and Dime Store. 12 years later in Bentonville the first Wal-Mart opened, and today Bentonville is the headquarters of Wal-Mart’s $220B global empire. When Sam Walton died, he was the richest man in the world. His wealth was by chance, but it wasn’t by accident.
“I run on the road long before I dance under the lights.” – Muhammad Ali
Three years ago, Steve Jobs was busy developing the iMac into a multimedia editing device. Jeff Robbin, a 28 year old developer who had left Apple months before Jobs’ return, had started a company to develop Soundjam, a jukebox program. Jobs bought the company as Robbin had impressed the team at Apple, and over the next year Jobs asked him to develop a jukebox for the Mac, which he did, naming it iTunes.
Jobs thought, if photo files can be portable in your camera, why can’t music files be portable too? So next he asked Robbin if he could come up with a portable player, and nine months later the iPod was launched. But it was only after the team was playing with the iPod prototypes that they came up with the idea of the Apple iTunes online music store. Less than 18 months after the rollout of the iPod, the online store opened in April 2003. They hoped to sell a million songs in the first six months, and ended up selling that many in the first six days.
The online music store was the critical bridge that opened up the entire PC-user market in a way that software alone had never managed to do for Apple. Apple now owns a 62% of the online music market and Apple’s iPod business alone is predicted to hit $6.2 billion in 2006, about as much as all of Apple when Jobs took over. Did Apple’s share price triple last year as a result of a plan, or as a result of sheer luck? Steve Jobs has now on three separate occasions made a billion dollars by being lucky. But none of the three happened by accident.
“Give luck a chance to happen.” – Tom Kite, US Golfer
So will your entrepreneurial success be as a result of a plan, or as a result of your passion? Will you focus on exiting, or focus on experimenting? Great entrepreneurs do not create success. They create the conditions for success to occur. Only by giving luck the chance to happen, will you happen on wealth by chance.
What will you seek to improve in the coming month? How will you measure your progress?
At one of our seminars last year, a deflated lady came up to me at the end of the event and said “How can I possibly be successful? I’ll never be as good as everyone else here.” I met her again recently and asked her how she was doing. She said she hadn’t really made any progress: “Why even bother? I’ll never be as good as everyone else.”
This month, commit to changing something. Meet a mentor. Read more. Complain less. Cut your costs. Cut your calories. Change something and then measure the change. Compare. Not against others -against yourself. Don’t make it hard work. Make it easy. Make it fun.
“I do not try to dance better than anyone else. I only try to dance better than myself.” – Mikhail Baryshnikov.