The Outsider's Edge E-Book

Brent D. Taylor

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2011

Seitenzahl: 626

Beschreibung

The secret of extreme wealth creation The Outsider's Edge reveals the one common denominator the world's richest self-made people share. Studying the lives of 17 world-famous billionaires, author and researcher Brent Taylor discovered that their one shared experience is that of the outsider. From Bill Gates to Richard Branson to Warren Buffett, being different from their peers, and proud of it, has served as prime motivation for many of the world's most spectacularly successful people. Turning the conventional wisdom about wealth on its head, The Outsider's Edge reveals the true value and importance of being different. Brent Taylor (Australia) is a professional researcher who has worked for more than 20 years as a market researcher to government and corporations.

Leseprobe

Contents

About the author

Preface

Part I: Introduction

Chapter 1: Why haven’t I got what Bill Gates has?

Chapter 2: Seeking the causes of extreme wealth

The billionaires can’t tell us why they became wealthy

Developing a ‘theory of everything’ for becoming extremely wealthy in a lifetime

Looking for secrets in the right places

Part II: Biographies

Chapter 3: Bill Gates

Achievement

Development

Interpretation

Chapter 4: Warren Buffett

Achievement

Development

Interpretation

Chapter 5: Ingvar Kamprad

Achievement

Development

Interpretation

Chapter 6: Larry Ellison

Achievement

Development

Interpretation

Chapter 7: Carl Icahn

Achievement

Development

Interpretation

Chapter 8: George Soros

Achievement

Development

Interpretation

Chapter 9: Steve Jobs

Achievement

Development

Interpretation

Chapter 10: Charles Schwab

Achievement

Development

Interpretation

Chapter 11: Ralph Lauren

Achievement

Development

Interpretation

Chapter 12: David Geffen

Achievement

Development

Interpretation

Chapter 13: Frank Lowy

Achievement

Development

Interpretation

Chapter 14: Richard Branson

Achievement

Development

Interpretation

Chapter 15: George Lucas

Achievement

Development

Interpretation

Chapter 16: Bernie Ecclestone

Achievement

Development

Interpretation

Chapter 17: Steven Spielberg

Achievement

Development

Interpretation

Chapter 18: Oprah Winfrey

Achievement

Development

Interpretation

Chapter 19: John Sperling

Achievement

Development

Interpretation

Part III: The Big picture

Chapter 20: Finding the pattern

Are seventeen self-made billionaires representative?

What’s out — class, luck, risk-taking and secret moves

What’s in — personality, outsiders, difference, direction and drive with a special mention to trading

Chapter 21: Outsiders and their edge

What is an outsider?

An insider is not the opposite of an outsider

An outsider can also be an insider

Outsiders, adapted outsiders and the socialised

Difficulties in spotting outsiders

Outsiders are different

Direction is critical

Drive or hunger?

Trailblazing to success

Part IV: Beginnings matter

Chapter 22: Development pain

It mainly happens before eighteen

Mothers make the world go round

Dads — bit players in the family drama

Those golden school years revisited

University or richer than 10000 college professors

Moving about

War

Disability at school

Why boys and not girls

Combinations

Chapter 23: Salvation

Saving themselves from the shipwreck of their lives

Cobbling together a life out of found experiences

Chapter 24: Learning about learning

Pavlov’s dog and other animals

Primitive learning in people

Learning about life

Finding the inner workaholic

Chapter 25: Trading intelligence

A short critique on intelligence

Power and multiple intelligences theories

Intelligence is for doing things

Trading as a natural or innate intelligence

Part V: Lessons Learned

Chapter 26: Don’t try this at home, folks

Kids need love, not wealth

Money and happiness are uncomfortable bedfellows

Families and spouses are the real key to adult happiness

Mortgaging kids’ emotional present and future for the sake of their financial future

The ideal way to rear a child

Chapter 27: Hope for the future

Outsiders have the edge

Outsiders are everywhere

Difficult beginnings can lead to extraordinary outcomes

Bibliography

Further reading

Index

First published 2007 by John Wiley & Sons Australia, Ltd 42 McDougall Street, Milton Qld 4064

Office also in Melbourne

Typeset in Berkely LT 11/13.2 pt

© Brent D Taylor 2007

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication data:

Taylor, Brent D

The Outsider’s Edge: the Making of Self-Made Billionaires.

Includes index.

ISBN 9780731407316 (pbk.).

1. Billionaires - Case studies. 2. Wealth. 3. Success in business. 4. Finance, Personal. I. Title.

332.02401

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Front cover (clockwise from left to right): Oprah Winfrey, Frank Lowy, Bill Gates, Warren Buffett and Richard Branson

Front cover: Newspix/Newspix/AFP Photo/Timothy A Clary

Back cover: Newspix/Newspix/Ross Schultz

Wiley bicentennial logo: Richard J Pacifico

Author images © Merran Kelsall

Disclaimer

The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis for any decision to take action or not take action on any matter which it covers. Readers should obtain professional advice where appropriate, before making any such decision. To the maximum extent permitted by law, the author and publisher disclaim all responsibility and liability to any person, arising directly or indirectly from any person taking or not taking action based upon the information in this publication.

About the author

Brent D Taylor was born and raised in several small towns in New Zealand. He gained a bachelor of engineering from Auckland University and then worked as a professional engineer in New Zealand and Papua New Guinea. On leaving the profession he became a professional photographer and settled permanently in Australia. Brent returned to study at the University of Melbourne where he gained an honours degree in psychology. For the past twenty years he has worked as a successful market researcher for government and large corporations.

Brent has long been fascinated by extreme achievers and as a researcher he was constantly frustrated by the lack of explanation as to why extreme achievers are as they are. This was the catalyst for the long, exploratory journey that has resulted in The Outsider’s Edge.

As a researcher, Brent is used to looking beyond conventional wisdom to find answers where others have tried and failed. In this case the explanation was in plain sight for all to see. Having discovered the secret, he was driven to write this book because no-one else was going to.

Brent is currently exploring the issues raised in this book and is running a survey on his website <www.brentdtaylor.com>. The findings from this survey will be used to form the basis of his forthcoming book; he would greatly appreciate your responses.

This book is dedicated to all the outsiders in the world who have so enriched us with their edge, particularly to the outsiders in my life, some of whom have used their edge to achieve great things and to the others who have not yet got there. No matter how small or large their achievements, all of them continue searching. For their ongoing support of this project, particular thanks go to all those friends who have helped me with encouragement, sage advice and infinite patience. Also, thanks to the first important outsiders in my life — my father and mother and those other important outsiders, my children Grace, Luke and Sam.

Preface

The Outsider’s Edge is the result of my long-held fascination with psychology and human behaviour, and, in particular, extreme achievement in business, politics, science and the arts. Wealth is an easily quantifiable form of outstanding success.

Initially, my interest in human behaviour led me to study psychology, in which I achieved an honours degree from the University of Melbourne in the 1980s. Since that time I have worked continuously in business as a market and social researcher helping clients understand individuals in social and business systems. Research methods I employ include focus groups and surveys, and I have conducted over 200 000 interviews. My clients are spread across a range of industries and include major retailers, developers, manufacturers, tollways, accident insurers, utility providers, education institutions, hospitals and government organisations.

Despite the different problems my clients present me, they all want to know the same thing — what makes the biggest impact for their organisation? They also want to be told the answer in a simple and, if possible, positive and entertaining way. They don’t want all the details — they just want to know that the findings are underpinned by data and scientific methods.

After five years’ intensive research I wrote The Outsider’s Edge because I wanted to share my discoveries. It has been investigated and written using the principles I apply as a professional researcher every day. In the book I discuss what makes a difference and then clearly and concisely explain my findings.

You will not find this book weighed down by excessive use of technical terms. Nor does it get lost among the many disciplines that it traverses.

I have briefly covered some topics that many learned books are dedicated to, and in which scientific and academic debate is heated. These topics include brain development, intelligence testing, learning theories, educational practice and the impact of genetics versus environment. There is plenty of reading to be done in all of these areas, so I have included a starter set of references for anyone who is interested in researching these topics further.

I apologise in advance to those with detailed scientific knowledge for any omissions in detail or if the arguments for their discipline aren’t fully presented. Only those parts relevant to the understanding of what makes self-made billionaires have been included in this book.

I would like to thank the large number of family, friends, colleagues and clients who have given me support, encouragement and critical advice over the five years I have been researching and writing this book.

Also, I would like to thank Michael Hanrahan for his early editing and encouragement, as well as the team at John Wiley & Sons for its support and help.

Part I

INTRODUCTION

Chapter 1

Why haven’t I got what Bill Gates has?

‘Why is Bill Gates rich and not me?’ Many people wonder why they haven’t got a fortune as they struggle to pay the mortgage, send the kids to the dentist or buy economy airfares for the family to somewhere not very exotic. After all, Gates is just a human. Like everyone else, he was born of woman, had a father, was a baby once and, like us all, wore nappies and was spoonfed by his parents. He learned to walk and talk, and even now he still has to do most of the normal everyday things we do. It’s a fair bet that he, like us, showers naked. So, why him? That’s what I’m going to investigate in this book.

Gates, with apparently normal beginnings, miraculously became the world’s richest man with over $50 billion. He has a bigger cash flow than some small nations and can buy just about anything he wants. Gates certainly doesn’t have any problem paying for his children’s dental care, he can buy a plane any time he wants to travel, and he could buy the exotic resort and the island it is on as well.

Oprah Winfrey has a mere 3 per cent of Gates’s wealth, weighing in at only $1.5 billion. Yet $1.5 billion is a phenomenal amount of money for any person to have, let alone to earn from a standing start. This is especially impressive considering Winfrey’s background — a dirt-poor, abandoned and abused African-American woman from rural US. Most of us would be excited to have even 3 per cent of her wealth. Like Gates and everyone else, she was a baby once too, and to all intents and purposes functions like a normal woman. Like Gates, it is a fair bet that Winfrey showers naked too. So, why her?

Some people theorise that maybe it was just luck, but such wealth is so statistically improbable that luck can’t explain it. Maybe it was God’s will or it was just meant to be. Possible, but this explanation is ultimately unsatisfactory as we all like to think we have some kind of control over our own destinies. Most people want their destinies to include more money, so God’s will or luck are ultimately unhelpful in their day-to-day struggle.

So what could possibly have led these two — and the 1000 or so other billionaires on the Forbes world’s billionaires list — to have so much money?

Chapter 2

Seeking the causes of extreme wealth

Surprisingly there was no consistent explanation for the self-made billionaires’ wealth up until this book was written. Certainly there are money-making ‘recipe books’ that have attempted to fill the void, but there aren’t any universal rules that the billionaires have all applied. Author Dale Carnegie famously proposed that the way to wealth was to ‘make friends and influence people’, but just looking at Gates and some of the other billionaires throws the friendship model into doubt. Donald Trump trumpets his own particular brand of money making while Richard Branson has a different take on making money, which seems to include having fun. But who is right? Who knows, as there is no way to test this.

The billionaires can’t tell us why they became wealthy

Unlike Trump and Carnegie, most billionaires are silent when it comes to explaining why it was them that became wealthy. Most do not even hazard a guess! Certainly they all have their own particular style — and in the case of Trump, peculiar style — but is it style that counts?

Gates said that ‘business is a good game. Lots of competition and a minimum of rules. You keep score with money’ (Lowe 1998). All very well for him to say but that isn’t how Winfrey plays it. Buffett annually pontificates on money matters but doesn’t ever reveal why he got rich instead of his buddy at school.

Even John Sperling, with a doctorate and a lifetime’s work in education, and who shares over $3 billion with his son (together both are major shareholders in the world’s largest for-profit education institution), is silent on why he is so rich. This is despite writing an autobiography that is remarkable for its candidness regarding his personal journey.

So, why is it that billionaires don’t impart the secrets of their success to the rest of us? It is because they actually don’t know why it is them and not someone else, and they probably don’t care. Certainly they know what they did but they don’t really know why they did it. How can they? They are human like the rest of us, and very few of us can untangle the influences that led us to where we have ended up. If we want to know about ourselves, inevitably we seek professional help to untangle the skeins of our lives.

This book sets out to do just that — untangle the skeins of seventeen self-made billionaires’ lives so that you might understand what caused their extreme wealth.

Developing a ‘theory of everything’ for becoming extremely wealthy in a lifetime

Albert Einstein was of the firm view that there was a ‘theory of everything’ that could be used to explain the physical universe. He failed to solve this problem, but he has inspired physicists to keep looking. Despite not finding the theory of everything, Einstein did propose key theories that have become the cornerstones of how we understand the physical universe and this may eventually lead to someone else solving what many consider to be the ultimate problem.

Einstein developed his famous theories by taking what was known about the universe at the time and looking for consistencies and inconsistencies. He examined the evidence and then proposed his theories. Others later confirmed them through experimentation. His task was Herculean. Not only was the problem he was trying to solve colossally complex and the difficulties compounded by it being unobservable, the problem was also steeped in centuries of conventional wisdom, which went way back to before Greek civilisation.

Prior to beginning my search, there has been no theory of everything when it comes to understanding how individuals become extremely wealthy. So I started with a proposal that it is possible to find a theory of everything about why some people become extremely rich. It may actually be that it is not possible to find such a theory but it will be fun and informative to try, and that is what this book sets out to do.

The problem I am setting out to solve is unlikely to be as complex as Einstein’s, and it certainly isn’t hidden by conventional wisdom. What little conventional wisdom that does exist can be dismissed fairly easily. The method used in this book is similar to that used by Einstein. While my research capabilities fall well below those of Einstein’s and the subject matter is undoubtedly simpler and different, the method he used is still valid in these circumstances. It is to examine all the available evidence for consistencies and inconsistencies, propose hypotheses to explain the patterns, and then test them.

Looking for secrets in the right places

Like Einstein, or any other scientist for that matter, I have had to identify what data is available and the best method to illuminate the problem.

First, it is obvious how second or latter generation billionaires have come by their wealth. They may have grown or lost the family pile, but beginning with a fortune changes the starting conditions. Their wealth is dependent on others more than themselves.

I only want to deal with people who made their own wealth — in other words, they are self-made. But what is self-made? Again, there are shades. Ted Turner started in his father’s billboard advertising company with a turnover greater than $20 million. Rupert Murdoch was given a newspaper by his father. Both have turned what appears to be a relatively meagre start into global media empires that are now in competition with each other. Despite growing their businesses thousands-fold, they did begin with a considerable stake compared with what most people can expect to start with. They are only semi–self-made!

This study excludes all billionaires that are not absolutely self-made, where self-made will be defined very strictly to include only those who did not start in the family business or had a substantial family stake. Therefore, Ted Turner and Rupert Murdoch do not qualify.

Second, self-made billionaires have to be found. Money, as Gates says, is a great way to keep score and the people that keep score brilliantly are Forbes. Forbes publishes an annual world’s billionaires list, which is available going back a number of years. The Forbes list has the great advantage of being an industry standard. If a billionaire is reported as having a certain level of wealth and is on the Forbes table then that is probably as good an estimate as can be achieved. Forbes do not make the distinction of self-made as adopted for this project, but their list is an excellent starting point.

Third, like have to be compared with like. This doesn’t mean those chosen have to be the same gender or in the same industry or country or anything like that. But they need to have been brought up and live in more or less the same political and economic system. The only way to make a fair comparison is to ensure they were brought up in approximately equivalent times. For this reason, the criterion will be that they must be on the Forbes 2007 world’s billionaires list (meaning they are alive in 2007). While all will have been born at different times, they will all have a large number of overlapping years. What is more, their money is measured by the same unit —2007 US dollars. It would be great to include, for example, Henry Ford but he was born before his model T-Ford became a ubiquitous form of transport, did business through World War II and died before the personal computer revolution. Too many influences were different in his life compared with living self-made billionaires. It may not make any difference to the final conclusions but it does eliminate a possible source of error.

The recently deceased Sam Walton, founder of Wal-Mart, also has to be excluded because he is dead. If he was alive, he would be wealthier than Bill Gates. Certainly his life overlapped considerably with Warren Buffett’s and Bernie Ecclestone’s but scientific rules are rules. Einstein would have approved.

Fourth, there must be information available. Given the generally secretive nature and general unavailability of self-made billionaires for interview it will be impossible to carry out ‘experiments’ on a sufficient number to test hypotheses. Besides, there isn’t really any hypotheses to test yet, so it would be a waste of time to start with interviews of billionaires and randomly dredge for information. Anyway, they probably don’t know.

Luckily there is information available. There are biographies and autobiographies on a smattering of self-made billionaires. This will suffice. But books on billionaires vary considerably. They usually concentrate most of the detail on the minutiae of business after the billionaire was on his or her way, often just starting at that point as if all that went before is not important. But what came before has to be important — we become who we are through a complex interplay of genetics and environment. From birth this ongoing interaction develops personality, hence childhood development cannot be ignored as a factor that separates self-made billionaires from the rest of the population. This may turn out to be the only place to look, since the minutiae of adult business dealings are picked over daily and are yet to answer the question, why them?

Like books on any subject, books on billionaires vary in quality and tone. Some are hostile, some are sycophantic, some skip important early detail, others drill down. For this project, books about billionaires have been chosen only if they report sufficient major early events as the billionaire was growing up. Certainly some are sketchy but there needs to be sufficient evidence in the book to at least infer what happened. In addition, it will be important to ignore any inference that other writers make about the source of a particular billionaire’s wealth since inference from a sample of one is always a risky business and is usually wrong. This book makes inferences after reviewing the lives of seventeen billionaires.

Fifth, the final step once the input data has been found is to do as Einstein did — look for patterns that explain the outcome. To do this we need to see what happened to the billionaires, what they did as they grew up, how they behave in adulthood, and then compare and contrast — concentrate on what they have in common.

I have identified seventeen self-made billionaires with books about them that fit my criteria. This is sufficient to find a pattern and develop a theory of everything about becoming extremely wealthy.

The next part of the book will examine each billionaire’s life. It will not go into the minutiae but concentrate only on the big events. Each summary or mini-biography is split up into three sections. The first concentrates on the billionaire’s achievements. The second discusses the circumstances of his or her development, particularly family background, mother, father, other family, schooling and friends. This section will take you up to the founding of each billionaire’s wealth-creating business. The third part of each mini-biography is an interpretation of the first two sections and identifies key elements in each of the developing billionaires’ lives.

The chapters following the mini-biographies will reveal the common pattern running through each of their lives, and will discuss this pattern in a broader context.

Now that the data has been assembled and the method decided, all that is required is to find the pattern. It is now time to set sail into uncharted waters to find out why Gates, Winfrey, Sperling, Lucas and all the rest became billionaires? Why them?

Part II

BIOGRAPHIES

Chapter 3

Bill Gates

Forbes information 2007

Rank: 1

Citizenship: United States

Wealth: US$56 billion

Industry: software/service

Bill Gates plays games with the world. In fact, Gates plays the world. He plays very serious, very successful games with extreme vigour. He plays games that affect the lives of millions, games that have enriched thousands of employees and stockholders and millions of users, but they are games nevertheless. Gates has been quoted as saying, ‘business is a good game. Lots of competition and minimum of rules. You keep score with money’ (Lowe 1998). But Gates doesn’t look like he is game playing; he looks like he is building the most successful software house in the world and making a fortune at the same time.

Achievement

After gaining valuable programming experience (and earning money from it) with friends at school, Gates was excited by the future of computing and its potential. He dropped out of Harvard to rejoin his school friend Paul Allen and together they set themselves on the visionary path of putting a computer on every desk and in every home. This was a visionary goal because at the time computers weighed tons, filled rooms with hot flashing tubes and huge whirring tape spools and used as much power as a small town. On top of this, those behemoths had less computing power than a standard mobile phone.

Personal computing was the fantasy of sci-fi nuts, along with Dick Tracy’s watch phone. Gates and Allen were among the thousands of electronics and computer nuts that spotted the now famous Popular Electronics cover of 1975, which showed the latest thing in personal computing — barely more than a box with flashing lights and toggle switches. The box had no easy means of interaction as we have come to expect from present-day computers. There was no internal electronic memory, disc drives, keyboard, screen or printer and the now ubiquitous internet and email were twenty years in the future. Yet Gates and Allen, and a few others (including Steve Jobs and Stephen Wozniak of Apple), saw this unpromising box of flashing bits as the future. It’s possible that they didn’t see this box as the foundation of an industry, but boxes of bits like this worked in sci-fi imagination so why not in the real world? Gates, like any isolated computer nerd, read this genre avidly and watched along with everything sci-fi available on TV and at the movies. Sci-fi is a genre replete with mysterious boxes with flashing lights and amazing functions. Computing was a short step in their imagination and a large step to application, but for a couple of antisocial lads with time and little else on their hands it looked like the future. There was no holding them back!