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
- Drive
- Energy
- Attitude
- Judgement
- Conviction
- Passion
- 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.
