Sol Price may have had one of the most profound impacts in our lives yet he is underserved and appreciated in modern times. Sam Walton named Walmart based on Sol's Fedmart naming and Price's company eventually became what we know as Costco today. After seeing a litany of Temu ads during the Super Bowl and even seeing my mother in law receiving a package I tested out their shopping experience which I found to be quite horrible and gamified with wheel spins and bonuses when I just wanted to purchase a Hydrogen Water Bottle.
This made me reflect on Sol Price's top 4 pieces of advice that resonate with almost any startup or business today. I have purchased the last remaining copy of his book on Amazon and will share more details when time permits.
1. Provide the best possible value to the customers, excellent quality products at the lowest possible prices.
2. Pay good wages and provide good benefits, including health insurance to employees.
3. Maintain honest business practices.
4. Make money for investors.
This advice is back from the mid 1900's and still rings true today. Provide a great value at a fair price, hire A players and pay them good wages to keep them on board, be compliant, and make your investors happy.
My friend is coming out with a book covering this topic but for my own note taking purposes I wanted to be able to save it here to come back and review the concept when needed. If you play blackjack the goal is to get to as close to 21 without going over and ending with a higher score than the dealer. So the way to organize meetings daily with your team is to spend 21 minutes in three 7 minute segments.
That's 7 minutes of What are you busy with?
7 minutes of what are your challenges?
7 minutes of what do you need from me?
Blackjack method 7 minutes each with your team each morning and then you get back to work.
Do you ever read a book and think wow I should be friends with this person? Thats how I felt in 2011 after reading The Fastlane book by MJ Demarco. Today the fastlane forum is still alive and well but the time to follow forums is so small these days but a quick newsletter read always provides great advice and tips. This week he covered loss aversion. Check out the bullet points below on how you can use loss aversion and fear appeals in your everyday business.
People stick with jobs they hate. Because they fear the loss of status and stability. Even when they have the potential to earn more doing something else
People tend to overvalue what they own. Because they relate selling with losing (the endowment effect). So yes, Tyler Durden was right. The things you own end up owning you
Investors sell their winning positions but keep the losing ones forever. Because they don't want to realize the loss
People try to cover their mistakes even when it's inadvertent. Because they fear the loss of credibility. The audit firm Arthur Andersen that caused the Enron Scandal was not convicted of securities fraud — but of shredding tons of documents to cover up its errors and avoid potential fines
Organizations resist change. Because the potential losers of the change are always louder than the potential winners
If you are a business book reader than read his book or Richart Ruddie's The Creatures You meet at the bar for a good laugh but don't expect to get any business advice from it. Every company is a mess but be less of a mess in the building stages of your company. To get to a term sheet convince the VC to invest post due diligence and as long as everything you said was correct you should be able to close your round. Trust is the foundation of every single relationship personal or professional so get an introduction from somebody who has that current trust.
I'm a professional problem solver and after reading Am I being Too Subtle he is one too. A great entrepreneur doesn't just recognize problems but provides solutions.
Sometimes you read a book and you feel like you know the person writing it. Books that resonate with you can have a lasting impact and help develop your career mentally, emotionally, and socially. This is one of those books where I kept on pausing to take photos of pages to take notes so that I can come back and do this post for when I want to pull up these quotes & ideas that he mentioned. Another book that I recommend that shared great life skills and advice is Stephen Schwartzman from Blackstone's book that I read first and found it interesting that he said he knew to get out and liquidate all of his real estate in 2008 when Sam Zell the king of real estate was getting out but at the end of the day Zell clarifies what what down and why in his book.
When people ask me what I do it's often a difficult question to answer since my life entails so much and there are multiple answers that I typically give one of which was similar to something he talks about in the book and Sam Zell says it perfectly: I'm a professional opportunist!
So here are the notes that I want to remember in perpetuity in permanent ink:
Sam Zell's first business was not actually apartments at The University of Michigan but rather he was in the magazine importing business buying and reselling playboys. This is where he learned one of the most important rules of business.
Where there is scarcity price is no object. The basic tenet of supply and demand is the core principle of business philosophy
If you teach your children that having fun is frivolous and drill into them diligence and intelligent discussions and education you will breed a winner.
Be comfortable standing apart rather than searching for a common denominator with others
Embrace the tendency to go against conventional wisdom
Sam realized that he didn't take orders from leaders well and was meant to be one not take orders from one. So setting the record was the path he created.
Meritocracy was a big learning experience at summer camp in Wisconsin. Another book I love Ray Dalio's principles is huge on meritocracy as well.
The basics of business are straight forward. It's all about measuring risk. If you've got a big downside and a small upside RUN. If you've got a big upside and a small downside DO THE DEAL.
Always make sure you're getting paid for the risk you are taking on and never risk what you can't afford to lose
Keep it simple a scenario that takes 4 steps vs 1 step is one that provides 3 more failure points.
Opportunity is very often embedded in the imbalance between supply and demand.
It could be rising demand against flat or diminishing supply or flat demand against shrinking supply.
When there's an imbalance look where the two lines will intersect and then determine whether it is cheaper to buy or to wait.
Be an owner, act like an owner, and when it comes to your investments, do everything you can to make sure everybody is aligned.
When there is too much reliance on outsiders who don't have enough skin in the game that creates problems.
Companies need engaged owners and staff members Owners are willing to give up short term benefits for long term gains.
An owner uses their vision to steward a company and guide management
Owners do whatever it takes for management, their teams, and company to succeed while working with others who have skin in the game and ensuring their interests align
A leader can not let his emotions impact his stability. Have methods that keep you steady.
My saying is to remember your ABC's - Always be calm, cool, and collected. In Ray Dalio's book he talks about the importance of mental health and having a clear mind. Working out, running, or yoga. In the case of Sam Zell he's an adrenaline junky who loves Skiing and riding motorcycles.
Look for micro opportunities from macro events. In Sam's case it was the deregulation of the radio industry where he struck gold and found a 1,237% return off of Jacor. Look for big picture influencers and anomalies that will direct the course of industries and companies.
First mover advantage requires conviction in regards to his distressed asset fund and timing is everything in regard to accepting an offer to sell Equity Office. Don't allow your personal feelings to interfere with your investments or your duty to your shareholders.
Sentimentality about an asset leads to a lack of discipline.
Chairman of everything and CEO of nothing. Sticking to what your good at: Vision, Direction, Strategy.
Behind The Deals Chapter
Stick to where you can add the most value. Sam spends his day listening to other people, He then asks questions, probes, and comes up with potential solutions.
Pick great people to run your companies and in Sam's case he doesnt involve himself in the day to day but stays close to those who do. This is a very similar strategy and mindset that Warren Buffet has with Berkshire Hathaway.
The Radius Theory of business - Your ability to succeed is ultimately limited by the number of people between you and the decision. The farther away from you the decision is made the less you control the risk.
You get buried when you delete too much or don't delegate enough
Culture is King, it's the heartbeat of your company. Meritocracy and open "kimono" policy.
Best predictor of success isn't IQ or being a rocket scientist but rather
Cut to the center of an issue
Assess a problem and see what the risks are and then dissect it but don't get caught up in the numbers
Progress, improvement, and forward momentum. Like Michael Jordan in basketball he made everybody else better.
See opportunity and convert it to something tangible.
Be on the lookout for anomalies and disruptions in a market or company. Be able to recognize the psychology of market extremes which can lead to attractive points of entry.
Any event out of the ordinary is like a beacon telling you there's a new opportunity emerging.
Be a good listener it can make all the difference in getting something done when somebody says no.
Immerse yourself in the life of a project and the book concludes with this:
An owner is consumed with making the most out of what he already has. An entrepreneur is always looking for a new opportunity always reaching.
While I have family in Chicago that is close with the grandchildren of Sam Zell I have never met him personally but had such glee from this book that I've called them up to see if they can help me get the book signed by Sam himself and thats how you know a book really resonated with you and you loved it.
Youtube and Coursera is the future of learning for those who want to absorb knowledge, learn, and get ahead. Youtube has so many great courses online and this Computer Science course brought to you by that other great northern California school. No not Stanford University but University of California Berkley. There are numerous videos in the series but if you're dedicated take a week and learn through this course here: https://www.youtube.com/watch?v=0dNAhN4ypFc&list=PL_iWQOsE6TfVmKkQHucjPAoRtIJYt8a5A&index=21
Having an issue on Google with your local business listing? If so you can call their support line at 844-491-9665. If you're looking for a great book recommendation check out Zero to One by Peter Thiel.
Abundance by Peter Diamandis and Steven Kotler it another highly recommended book to check out. Diamandis talks about creating high impact and social entrepreneurship like companies that will affect billions and create positive change in the world. From solar energy, clean water, and vertical farming are just some of the many discussions that he opens the readers minds up to.
If you haven't read any of Diamandis' books then this is a great one to start off with before moving onto to Bold which is his follow up to Abundance.
On a recent Chat with Traders interview somebody I have followed for years Ed Thorpe was interviewed. I highly recommend those that are into Mathematics to listen to it here.
The interview is for an upcoming book release by the famous mathematician and Beat the Dealer author. At the end of the interview he discusses his memoir and how he got started in life and into things like Blackjack, Roulette, the stock market, and the different profit centers that he found along the way. These include statistical arbitrage and a hedge fund that was chronicled in a book that I read years ago called "Quants". He also says at the end of the interview that you can still beat 90% of the investors without doing a lot of work as the majority of people are lazy. It is however important about finding out whats really important in life. Most people in life just don't get it because some people put too much value into work and not into truly living because money truly isn't everything. People get hooked and don't stop working for money because you can never have enough and thats what drives a lot of people to pile up more and more money (not true wealth) and then wondering what it was really for? In the end if you can't go out and enjoy it why did you work so hard to obtain it?
Lesson: Don't just pile up wealth. Do something of value in life. Think about how you will be remembered.
Shopping at Barnes & Nobles for some new books this evening I noticed something peculiar.
There are little to no softcover books. The majority of the store is filled with hardcover books. When I travel my preference is to have a great softcover book to fit into my bag. Tonight I purchased two softcovers and one hardcover but it was not easy to find. Naseem Talib's Fooled By Randomness was a gigantic hardcover that looked nothing like my personal soft copy. It was so abnormal that I almost purchased it thinking it was a book I didn't own already but I doubt thats why there are so many hard copies in the store.
Where Have all the softcover books Gone?
All the softies are being forced out. Is this a non-capacity issue? Making the store look more crowded with books without actually having to fill it with as many books? I am not quite sure but the nice lady at the checkout pushing the BNC club on me said it was a corporate decision and she did not know why.
If you have thoughts or reasons on why you can almost only buy hardcover book at Barbes & Noble then please do let me know.
Nudge: Improving Decisions About Health, Wealth, and Happiness
This book was originally published in early 2009 by Ricahrd Thaler and Cass R. Sunstein. I recently had the pleasure of meeting with my distant cousin Matthew who I had not seen in over twenty years. We had the pleasure to catch up about his work as a scientist in Illinois and soon to be Iowa and great books that we had in common. One that came highly recommended that I just purchased was Nudge.
If you know me then you know my love and expressed consent to read How To Win Friends & Influence People by Dale Carnegie. He has a list of other great books that preach what I try to practice in everyday life. By the end of the summer an additional Carnegie book will be under my belt.
The Real and the Cereal by: Chuck Klosterman. When I first read eating the dinosaur I had no idea what I was about to embark upon. In the end Chuck had a new fan ready to purchase all of his books.
As always for the best deals you can purchase books at Amazon, Flea Markets, Consignment shops, or use your local library for free rentals.