Profit with people

Sam Wyly? Never heard of him. Is he related to that famed Warner Brothers cartoon character, Wily E. Coyote? Well, yes, if you consider that both live in Texas. But no, because the first is immensely rich while Wily continues to pursue the Road Runner and gets its head smashed in a desert rock.

Sam Wyly, as I only recently read about, is a serial entrepreneur who started businesses such as University Computing, Sterling Software and took over the running of Bonanza Steakhouse, amongst many successful commercial ventures. The first I have never read about, but I know the second and third businesses. He was a millionaire by the time he was 30 years old. Today, he is 70 something and a billionaire. Now why did he fall under my reading radar all these years, when even his compatriot and friend, Ross Perot, is so much more well known, though not necessarily more wealthy? I really don't know. But I am glad I made his acquaintance through his autobiographical book, "1,000 Dollars and an Idea". I would normally not pick up any book that boasts about getting rich or how to do so. Not that I don't want to but I am realistic. Let's just say it isn't in my genes to become one - financially rich, i.e., though Mr Wyly might disagree. It was those technology companies mentioned in the jacket of the book that interested me.

The book recounts Mr Wyly's rags to riches story, of how he exploited, legally of course, opportunities that came along to enable him to build companies that made lots of money. And doing so with hardly enough money of his own in the bank. Would-be entrepreneurs could learn a thing or two on how he did it. He is a person of his times, when computers (NOT personal computers) were becoming important. Is it any surprise that he cut his teeth with Tom Watson Sr and Jr while working as a salesman in IBM? His story is a fascinating one, as he recounts how he started companies, built them, then sold them, acquired others, sometimes through leveraged buyouts, and accumulated wealth in the process. Of course, he did lose money along the way, lots of it, and he failed to realise some of his ideas, or dreams, but he is sanguine about it. One has to be patient and it will pan out. They did, most of the time, i.e.

One of the things that I took away from this account is the importance of people in your lives, and how it is important to identify them, trust them, get them to work for you, nurture them and share the rewards with them. That is probably one of the keys to his success. The other is the lesson of creative destruction - to know when to quit, when to exit a business. Many hold on to their babies, see them grow up and old, and die.

Not so Mr Wyly's approach. He does not seem to be sentimental about any company he has formed. Instead, he is sentimental about the people who took the journey with him forming these companies. As it turned out, he was right many times and profited from those decisions, some in the nick of time. Some would say he has a good sense of timing. Others would say it is just dumb luck. Whichever way, he made his fortune with an eye for opportunity and, shall I say, a lot of daring.