How To Get Rich

How do you lay the foundation for getting rich? Its a process we all must have the patience and passion to attain.

Mark Cuban understands how to get rich. His success has come from the ability to see opportunity and take the necessary steps to accomplish his goals. This is certainly an over-simplification, but understand that is a macro-approach to the situation. Gaining real wealth means expending all the resources at your disposal and committing the house when the right shot comes around. In youth, the stakes are high but manageable. I don't want this blog to always seem like we have nothing to lose because of our age, but it should drive home the point that now holds fewer consequences.

Even if the right opportunity is not in front of you at this moment, the preparation will make all the difference. Mark has always been very specific about the role discipline must play starting out. There are no shortcuts to real wealth and no gimmicks that will actually make this process any easier than the sweat and stress involved. The discipline takes on a few dimensions. The first is the discipline of saving money and shopping smart. No matter your salary, conserve as much money as possible, not for long term retirement, but in order to have the cash available to make a significant play at the right opportunity. Cash is king in business.

The next facet of discipline involves the patience it takes to wait for an unstable market to attack. Get the best deal possible and be ready for a bust at any time. Learning the business you want to pursue should include learning the historical causes of booms and busts. You must commit to understanding the data and the ramifications from numbers that seem inflated or overexposed. It is during these times whe you use that money you have been conserving. See the opportunity and seize it.

Clay Shirky: Cognitive Surplus

What do you do with your spare time? Are you improving yourself or society?

We grew-up on TV. It's a fairly simple fact that television changed the way we utilize our free time and it has been that way for over 50 years. Clay Shirky gives a phenomenally insightful speech at the Web 2.0 Conference on what this technology has done to the population and how we will buck the trend with a fundamental shift in the way we utilize media.

After World War II, the 5-day work week meant we had to learn as a population how to use our time away from work. Television and, as Clay singles out, the sitcom took hold and held a tight grip on our hours. For this period of time, there were few other options. There were no blogs, no podcasts, no file sharing, and no open-source technology. Well, the world has changed. In what Clay identifies as an Architecture of Participation, media is turning into a triathlon. The population now wants to consume, produce, and share their media. It's the time of the people.

Think of all the hours wasted staring at a television that provides little in return. Something as simple as sharing an idea means you have taken the time to change society. That idea can circle the globe within seconds of striking the enter key. And, certainly, doing something is better than nothing. Pick your platform and utilize it. Who cares if your ideas are not entirely original? Piggy-back on the wisdom of others. Sharing is still a pillar of new media, just give the originator their credit.

Clay says some extremely insightful things as he surmises the argument. The future is in participation. He says, "Media that is targeted for you that does not include you is not worth watching." Many industries dying a slow death can attest to this (newspapers, music, etc.). Locking out the user sets the stage for a major coup. The over-throwers are the same users you used to call customers.

Talent Development

If you look carefully at the former employers of many of the most successful entrepreneurs and executives in the world, you will start to notice a pattern. Certain companies have an uncanny ability to develop talent. This doesn't happen by chance, but because they take the time to find potential and nurture growth. GE, Proctor & Gamble, Coca-Cola, and Microsoft are known to be some of the best and they invest a great deal of money and resources to keep it that way.

In my business, the William Morris Agency mailroom was the ultimate place to start a career. Young graduates would take substantial pay cuts (and check their pride) in order to deliver mail for the talent agency and it's stable of stars. Michael Eisner, David Geffen, and Barry Diller are just a few of the media industry legends willing to work their way from the bottom-up. While there are now more agencies to choose from, the mentality is still the same. Work the long hours, accept the low pay, and learn all you can. If you don't work out, there are 100 other kids willing to take your spot. This program is a little more extreme than the talent development programs at your typical company, but there is something to be said for succeeding in an environment like this.


I started thinking about talent development while reading this article from Bloomberg Business Week about the next generation of tech companies being started and/or funded by former Google employees. The conglomerate has produced an unbelievable number of start up founders that are revolutionizing all areas of technology. Those who are not starting the companies are investing and helping in early-stage development. It should be said that the ex-Gogglers have more money than your typical young, former employee, but it's more than just the money that is creating all this success and wealth. It's about the network and experience that comes with working at Google. These entrepreneurs and investors have direct involvement in Justin.tv, mint.com, Foursquare, Twitter, Facebook, Tapulous, Y Combinator, and bit.ly to name a few. The network is kept alive through events organized for the purpose of sharing information and ideas.


So where is the lesson here? Really it is two-fold. First, do your research on the companies who will identify your talent and open doors through development for the future. Sometimes there may be a pay cut from other opportunities, but understand it as an investment in your future. The second lesson is the importance of recognizing people with whom a relationship will be mutually beneficial and fighting to keep that connection alive.

The Future of Money

Could the financial transaction industry be going the way of the music, television, and publishing industries?

The situations feel similar. A tight, protected system built over many years and controlled by a select group of super-companies that have free reign to charge and operate how they please. Then, a group of developers come through and make the entire business open, easy, and cheap. The internet provides the opportunity and the entrepreneurs create the innovation. WIRED proposes the idea that we may be in for a fundamental shift in the way we transfer money with Paypal as the instigator.

Creating the credit card was the first monetary revolution that our generation accepted as standard. In fact, I can't remember life without plastic money. The change from cash only made banks more powerful as they could charge fees for merchants to accept this form of payment. It's really the ultimate partnership between the card companies and the financial institutions and it's one that costs the business owner 6 times what that purchase would cost with cash.

Paypal used to just be the primary form of payment on Ebay, but has done something I believe most large tech companies will do in the future; open the code to developers and let them create new innovations that originate new revenue streams for the company. This country is full of highly educated tech developers lacking the proper established networks and systems used to create highly innovative new companies. When Paypal opened up, thousands of coders came in and made the business of transferring money easier and available on whatever platform you use most. It could be on your smart phone, through social media, and even through subscription services available on ITUNES. They are effectively taking the arduous 10-step process of the past and breaking it down to 3-7 steps for a complete transaction.

WIRED singled out these companies as the leaders: Twitpay, Zong, Square, GetGiving, Hub Culture, and Obopay.

Discover Your Business

Sometimes to discover your business, you just have to start your business.

Steven Blank defines a start up as an organization formed to search for a repeatable and scalable business model. The business model essentially describes how your company will make money. Ask any leader to describe their business model and I can almost guarantee you won't get anything resembling a short answer. The reason is simple, in order to maximize profits and efficiency, the boss has to understand the smallest nuts and bolts of the business. This comes from experience and, most of all, the desire to have this knowledge. One of the benefits of starting a company is that you become the first and hardest working employee. There isn't a job too big or small for someone who can't afford a staff.

All this learning allows for tweaking or complete shifts in the business philosophy as the search continues for a repeatable and scalable model. It's where you meet customers and learn about your product from an outside perspective. It's where you learn the real profit margin on each unit delivered. It's where you discover your business.

The hardest part of this early stage development is the lack of money and direction. This is where that eternally optimistic voice in your head must keep reinforcing faith in your instincts and the product. As this NY Times article points out, even Pandora took 348 pitches to land VC financing.

The World's Most Innovative Companies

Fast Company's list of the World's Most Innovative Companies is a fascinating look at the speed required to keep business on the cutting-edge. A leader's ability to anticipate the future and answer consumer's questions before they ask is crucial to constantly creating new products and services that will increase revenue. Here are a few highlights from this year's list:

Sportvision: The company that brought us the yellow first down line and the digital strike zone is now breaking down every aspect of a single play in Baseball. Two cameras set up at the stadium will capture 600 locations and allow managers to determine which player has the best knack for play-making by analyzing their movements to the ball and the player's range. The technology also breaks down a pitcher's trajectory and how prone he is to be stolen against. Yes, this takes the feel out of a game that is very much instinct and reaction, but it is still pretty cool to know.

Glam Media: I include this example only to show how new media is transforming how we receive information. The company is a network of 1,500 blogs targeted for women. It's significance is in the ability to provide so many marketing opportunities from one media company (a right once reserved for only highly diversified newspaper and TV/Movie media conglomerates) to it's advertising partners. The business thrives on it's innumerable micro-audiences still of high value to marketers.

Ngmoco: I previously spoke of the incredible business mobile app development has become. Short for next generation mobile company, NGMOCO creates games, mostly for the iphone, and gives them away for free. Their revenue comes from virtual goods and services layered into the programs to enhance game play and sold for a fee. The company also launched it's PLUS+ network in order to create a community to display scores and challenge others through social media.

Katalyst: I like this company for so many reasons. Being in the media industry, I understand very clearly the dramatic shifts taking place and threatening the hierarchy that has been strong for about 85-90 years. Ashton Kutcher, the founder, has taken his production company to the front of the curve. Most movie stars simply use their celebrity to setup production companies to produce their movies, but Ashton is using his status to help large corporations reach a younger audience through new media. He uses the web to showcase his series, shorts and help promote the companies through his extensive social media network. I believe he has the potential shift entire marketing campaigns and media strategy.

Dreamworks Animation: The movies are not why I chose to include them on the list. It's because they are now an incubator for new technology developed to enhance the movie experience which is spun-off to the Silicon Valley community. They are far more than a movie studio now.

Scribd: Self-described as a community of 'millions of readers, millions of documents', this service allows anyone to upload, comment, vote up or down, and tag any document. The service is easy-to-use and let's anyone share their findings or read the findings of others. There are also partnership deals with large media companies that provide the opportunity to read books and newspaper articles both for free and at a fee.

There are so many other innovative companies changing the world. Take some time and learn about the advances. Intellectual curiosity is an important trait to develop in your business career.

Execute

Consultants tend to be good consultants because they have the ability to analyze information and suggest solutions. Analysis is an important part of business but has nothing to do with how successful your company will be. The single determining factor in achieving your goals is the ability to implement. In other words, make things happen.

Let's back-up for a second. I am not saying that having the numbers and understanding your business won't pay dividends in the long run, I am simply saying that any good executive or entrepreneur has the the ability to 'Just do it'. The importance of this ability for entrepreneurs is made expertly by Mark Suster.

What does it mean to make things happen? It means to close the sale, convince suppliers to discount prices, hire qualified people, fire under performing employees, and constantly advance forward. In short, pay the bills and expand.

In my business, I am tasked everyday with delivering on near impossible tasks no matter how mundane without excuses. There is no room for being passive and you better have a good reason for not executing. It is part of our internal training. Our company is so successful because it is filled with self-starters and doers. This is not to say that everyone must operate at this level or that it's the only way commerce functions, but it could be the difference between your start up becoming a profitable business or your department meeting it's yearly targets.

Be aggressive, execute, and make things happen.