Over the last 20 years, economic and political power has been shifting towards
emerging economies. A number of developing countries have become centres of strong
growth, raising their shares of global income significantly, which has made them major
players in regional and global affairs. Furthermore, flows of trade, aid and investment
between emerging and developing countries have all intensified.
The Perspectives on Global Development 2010 presents the evidence which documents
these changes, what we call ‘Shifting Wealth’. As the world emerges from the crisis, the
report clarifies this new global reality and what it means for development. Clearly, it implies
that development strategies need to be rethought in the new international environment. The
PGD 2010 suggests ways in which developing countries can best take advantage of the new
economic landscape and supports calls for global governance to be reformed, making it
more inclusive.
The Perspectives on Global Development has been guided by and contributed to by
eminent scholars from developing and emerging countries, our Non-Residential Fellows. In
this paper, Dr. Martyn Davies, from the University of Pretoria, discusses how the global
financial crisis is accelerating China’s investment in Africa, a region that is becoming more
important to Chinese firms that are beginning to venture out into the global economy. In
particular, he poses three important questions: What contribution will China have on
industrialization efforts in Africa? Does China’s concessional finance model offer a new
mode of developmental finance for Africa’s extractive industries? And will China’s
investment in infrastructure on the continent assist regional integration of African
economies? Combined, these three questions provide an overview of the impact China will
have on the long term developmental prospects of Africa.
©Mkimya Ent.
Wednesday, October 3, 2012
What's The Long Term Vision For China's Increased Investment In Africa?
While anyone believing that China’s vision for investment in Africa is motivated solely by altruism as pure as the driven snow would be guilty of contemptible naivete, the notion that it’s a sinister, nakedly imperialistic drive purely for control of resources is equally misguided.
A good read on this topic is Deborah Brautigam’s The Dragon’s Gift: The Real Story of China in Africa. What she argues in essence is that China is replicating something that really worked to kick-start China’s own development in the 70s and 80s, with Japan playing the role in China that China now hopes to play in much of Africa.
In China, Japan did a great number of resource-for-infrastructure deals, where it built mines, roads, ore processing facilities, rail lines, shipping ports, and much more and took in exchange the mineral wealth that that infrastructure produced and helped to transport. China at the time simply couldn’t have paid for the infrastructure, and therefore had no real way to turn its resources — coal, copper, iron ore, even back then oil —into infrastructure or the money to pay for it. Aside from the infrastructure, which Japan simply transferred to China once the in-kind payment in resources had been made, China also got a whole lot of know-how. Technology transfer was always a part of these agreements.
Yes, China is also playing a geostrategic game to win the support of African (and Latin American) states, which it has, for a long time, courted as a check against perceived American and (once upon a time) Soviet hegemony. It plays checkbook diplomacy against the government in Taipei to try to win away those few remaining states that acknowledge Taiwan rather than mainland China as “China.” And it has certainly gotten in bed with rulers who most of the rest of the world rightly regards as kleptocrats and tyrants — Basheer, Mugabe, and more. And I think there’s much to the argument that all this largess is enabling the kind of corruption and kleptocracy that still plagues the continent.
But Brautigam points out that Chinese aid and investment in Africa is actually rather evenly spread among countries in Africa that don’t have Zambia’s copper or Angola’s oil. She details investment and aid in a large number of countries that have no obvious mineral or resource wealth that China would want to export. Chalk this up to China’s efforts to gain “soft power,” however clumsy and ham-fisted many of those efforts have been. (They do seem to build a lot of stadiums, which by my lights shouldn’t necessarily be a priority in countries where 90 percent of the people are living on less than a dollar a day!)
There’s a misconception that all Chinese investment in Africa is driven by state-owned enterprises or the Chinese government itself. That isn’t actually the case. China’s overall strategy in Africa, and its actions on that continent on the ground, are not by any means all centrally directed. Private companies, state-owned enterprises, and individual entrepreneurs have their own agendas, sometimes in line with and sometimes at odds with what Beijing is trying to accomplish.
Actually, it’s often just a bunch of scrappy, entrepreneurial types typically from southern Chinese provinces like Zhejiang, Fujian, and Guangzhou who set out for Africa initially as small traders, but realize that there are other opportunities where their skills and capacity for hard work can turn into profits. I’ll remember what I can of a similar story told by Lindsey Hilsum inGranta back in 2005 in their Africa issue, where the author argues that the scrappy entrepreneurial guys from Fujian, Anhui, Zhejiang and what have you have done more for Africa than Bob Geldof, Tony Blair, and Bono put together.
A bunch of guys from the same hometown might notice, for instance, that in the particular sub-Saharan African country where they’ve come as workers, the capital is swarming with European and American NGO workers and UN types who come in for meetings (on AIDS, or malaria, or agricultural or water projects, or what have you) and they’re all being gouged by the one and only decent hotel in town. “Aha!” think the scrappy southern Chinese guys. “What if we built a cheap-and-chipper three-star type hotel at a third the room rate but with all the amenities? We’d be rich!” And so they build the thing. Then they need to improve the road, and ensure a steady power supply for the air conditioners, and make sure there’s Internet access and decent phone lines, and that the mobile network covers their place, and that the plumbing works. They mobilize their networks of contacts — road construction teams, guys who sell diesel generators, or better yet the people they know who are building the new power plant, their friends at Huawei or ZTE to get the telecoms situation in shape. And before you know it, they’ve been responsible for catalyzing a fair bit of infrastructure with very tangible benefits to all living in the vicinity.
There’s another book that argues Brautigam’s position perhaps even more forcefully. It’s called Dead Aid: Why Aid is Not Working and How there is a Better Way for Africa by Dambisa Moyo (a Zambian by birth), and though it’s focused mainly, as the title suggests, at the problems of aid, it also extols the virtues of the Chinese approach.
©Mkimya Ent.
The World's Richest Restaurateur Has A Secret: It's Not About The Food
Tilman Fertitta has made a fortune buying up and revamping distressed restaurant and entertainment brands. Photo by Tim Pannel.
Tilman Fertitta is barely past the first of his many morning cups of coffee and the first ten minutes of our meeting when he decides, as is his wont, to take control. As soon as I break out my tape recorder, he picks it up and places it on top of a paper cup, within wrist-snapping distance, turning it off and on during our discussion as he deems fit. Having noticed poor lighting on another floor, he dispatches a passing employee to fix it. When I ask the 55-year-old to tell me about how he got started, he admonishes me in his thick Texas twang: “I’ve overread that story. I just hate to go that far back.” So we don’t, for now, because as Fertitta later tells me, laughing, “I do whatever the f–k I want.”
Most of the time Fertitta, the 100% owner of Landry’s, wants to gobble up hospitality businesses: specifically, poorly managed, out-of-date and distressed restaurants, hotels, casinos and boardwalks that he can buy on the cheap, often right out of bankruptcy court. Fertitta then cleans house. He fires top executives, closes failing locations, revamps existing ones and moves management to Landry’s headquarters in Houston, where he can keep an eye on everyone. “When we buy somebody, we cut the head off,” he says. “We keep the operators who are looking–I hate to use this term–they’re looking for a leader. We lead very well. And we immediately spend money on them and make them better. Everybody wants to be led.
“Except for me,” he adds. “I want to lead.”
We’re having coffee at Michael Patrick’s Brasserie, a 24-hour restaurant (named after his two eldest sons) housed inside the Golden Nugget Atlantic City, one of the latest turnarounds he’s leading. Throughout the weekend Fertitta, who is bunking on his 164-foot yacht, the appropriately named Boardwalk, will oversee the property’s grand reopening, featuring a value-oriented talent roster, including Whoopi Goldberg, the Cake Boss and the Real Housewives of New Jersey. It was a typical Fertitta deal: He bought the waterfront casino and hotel from bankrupt Trump Entertainment Resorts for $38 million in February 2011, less than one-tenth a recent offer and $282 million less than what Trump paid in 1985.
As gambling options pop up around it, the Atlantic City market remains troubled. But bettors would be foolish to wager against Fertitta, who knows how to get leisure dollars out of consumer pockets. Fertitta is the richest restaurateur in the world and its most active dealmaker. Using Landry’s as his vehicle, he has rolled up five public companies and countless smaller deals, and floated six larger equity offerings. His biggest deal was taking Landry’s private in October 2010 for $1.4 billion, including $700 million in debt. He now lords over a $2.5 billion (sales) company that encompasses 421 outlets–all but 10 are stand-alone restaurants–and 56 brands, with a heavy dose of tourist-driven sit-down spots like Chart House and Bubba Gump Shrimp.
Mediocre food, it turns out, pays. FORBES estimates that Fertitta, who also owns a Rolls-Royceand Bentley dealership, is worth $1.5 billion, and his fortune is growing as he continues to expand. “He is like a private equity investor, but he does it with his own money,” says Rich Handler, CEO of the investment bank Jefferies, who helped refinance Landry’s debt in 2007 and has become Fertitta’s close friend. “He took Landry’s private because the public markets weren’t going to allow him to invest in the properties as he saw fit. Now he has operated his way to exceptional cash flow that he continuously invests to improve and expand his properties.” In January Fertitta completed his first hostile takeover, buying 90-plus-location McCormick & Schmick’s for $131.6 million and quickly closing locations that were losing money. “I had never done a hostile before. I wanted to see what it was like,” he laughs. “It wasn’t painful for me. Was painful for them.”
While his blustery demeanor masks it, hospitality is in his blood. His grandfather Vic Fertitta ran Galveston’s legendary Balinese Room, a gambling house that in the 1940s hosted stars like Frank Sinatra, the Marx Brothers and Bob Hope. Fertitta’s father, also Vic, later owned a seafood restaurant in Galveston, where Fertitta peeled shrimp after school. That family history is still visible across the Landry’s empire. One steak house brand, Vic & Anthony’s, is named after Fertitta’s father and uncle. Cousins Lorenzo and Frank Fertitta operate Ultimate Fighting Championship and Station Casinos in Las Vegas.
But it was his youth spent on the Texas coast that perhaps had the biggest impact on Fertitta. As a teen he often worked as a lifeguard at a Galveston hotel, where he says he learned firsthand that people always flock to coasts. Today he owns and operates the Pleasure Pier where that hotel once sat. Almost half of his properties are in coastal cities; 80% of those are right on the water. Of his restaurants, 196 primarily serve seafood, under brands like Fish Tales and the Oceanaire, as well as Chart House and Bubba Gump Shrimp. “You can put the greatest seafood restaurant next to an average steak house in an urban area, and that steak house will do more business than the seafood place,” he says. “If you go to the water, you can put an average seafood place next to the greatest steak house, and people are going to eat seafood.”
Fertitta took his first big gamble at 23. Capitalizing on the vast wealth of the Texas oil boom he obtained a loan and built his first hotel, the 160-room Key Largo on the water in Galveston. He entered the restaurant business in 1980 when he joined up as a real estate specialist with Landry’s Seafood restaurant. Six years later he sold Key Largo and used that cash to acquire a majority interest in Landry’s and another restaurant, Willie G’s Steakhouse & Seafood. In 1988 he bought a hurricane-ravaged restaurant named Jimmie Walker’s on the boardwalk in Kemah, Tex., 20 miles from Houston. “It was a huge risk,” says Jim Gossen, an early partner.
Fertitta converted Jimmie Walker’s into a Landry’s Seafood, and it became the most popular restaurant on the boardwalk. He eventually bought up every restaurant on the 40-acre Kemah boardwalk and transformed it into an entertainment complex with a wooden roller coaster, a Ferris wheel, hotel, stores and plenty of Landry’s-owned restaurants. One Houston Press reporter would later pejoratively call Kemah “the Land of Landry’s,” for having turned what was once a quiet shrimping town into a glitzy, full-blown theme park.
Landry’s went public in 1993 and then went on a buying binge: Joe’s Crab Shack in 1994, Crab House in 1996, Rainforest Cafe in 2000, Chart House and Saltgrass Steakhouse in 2002. Fertitta was famously patient in waiting for the privilege to pay bottom dollar. He bid for casual restaurant chain Claim Jumper in 2005 but lost out to a group of private investors who paid $220 million for its 20 restaurants. Five years later he bought the then 38-restaurant chain out of bankruptcy for $48 million. He offered $125 million for Rainforest Cafe in 2000, but a large shareholder rejected the offer; the stock plunged, and Fertitta picked it up for $75 million seven months later. In his 2010 book, It’s a Jungle in There (Sterling Publishing, 2010), Rainforest Cafe founder Steven Schussler termed Fertitta “a brash, arrogant, bargain-basement, bottom-feeding acquisition nemesis.” And those are some of the tamer words that have been used to describe him: ruthless and, yes, controlling, among them. Even Fertitta admits he is a bit obsessive, involved in all aspects of his business from negotiating deals to approving fabric swatches and working with chefs to perfect dishes.
Above all, Fertitta preaches cost control. He’s boosted restaurant-level operating cash flow at every chain he’s recently acquired: Chart House’s margin has jumped from 15.5% to 23.3%, Claim Jumper’s is up 4.9% since being bought in December 2010. Combined Ebitda of his last ten acquisitions (not including the recently opened Golden Nugget Atlantic City) is approximately $350 million, up from $200 million, as margins improve by an average of 6.3%.
This discipline proved especially useful during the last recession. “We were getting leaner and leaner before the downturn happened,” says Rick Liem, Landry’s CFO for the past ten years. At the time the company reviewed more than 250 items looking for cost savings. Where there were hardwood tables, tablecloths disappeared. In restaurants where the carpets were shampooed every two weeks, the schedule changed to every three weeks. Lemon wedges disappeared from plates that didn’t need them, and in restaurants where fries were apportioned liberally, meaning more than 8 ounces, the piles came down to 7. The line items added up to millions in savings.
Rainforest Cafe was a textbook example: Efficiency-minded Fertitta was quick to make changes to the concept, altering signature dishes and even removing what had previously been a hallmark of the restaurants–live birds. The chain’s founder, Schussler, had insisted that the birds not be behind glass walls but in the open, to be used as conversation-starters about recycling and conservation. But between bird feed, care and the ceiling vacuum systems required to keep bird dander off the food, the birds were costing each unit as much as $150,000 a year. Fertitta ditched the birds. Whenever he saw Schussler, Fertitta was always quick to mention what a steal he had made on the Rainforest concept, which Schussler describes as “rubbing salt in the wound.”
Yet when Schussler came up with two new “eatertainment” concepts, Yak & Yeti and T-Rex Cafe (he describes the latter as “the most oversensory place on earth”), there was only one partner he could find to bankroll the $100 million price tag of the new projects–Fertitta. “Who else would let me put an animatronic dinosaur on top of a live shark tank in the middle of a restaurant?” Schussler asks.
So what’s next? Fertitta says the company is busy “digesting” all of its recent acquisitions and claims to be done buying up 40-unit restaurant chains. “As the economy improves, there aren’t as many opportunities,” he moans. Any future moves will be on a grander scale. So now he is closing on his latest acquisition, a casino in Biloxi, Miss. that he plans to reopen as his fourth Golden Nugget Casino.
One thing Fertitta won’t do: dump any of his dozens of brands. In all his years in the business he has sold only one: Joe’s Crab Shack for $192 million in 2006. “I buy things that are good properties that I’m going to have forever,” he says. “I just don’t have any intention to sell anything. I believe you acquire good assets and you keep them and operate them. Twenty years from now,” Fertitta insists, looking across the lobby of the Golden Nugget Atlantic City, “I’ll still be here.”©Mkimya Ent.
Donald Trump Has The Midas Touch [Exclusive Interview]
I had the pleasure of catching up with real estate icon and billionaire, Donald Trump, who is the Chairman and President of The Trump Organization. Out of almost anyone, he represents what it means to have a personal brand. From his role as star and co-producer of the NBC hit series The Apprentice and The Celebrity Apprentice to his award winning golf courses and skyscrapers, the name Trump can be heard and seen across the world. Trump has authored over ten bestsellers and his first book, The Art of the Deal, is considered a business classic. His latest book, that he co-authored with Robert Kiyosaki, is called Midas Touch: Why Some Entrepreneurs Get Rich-And Why Most Don’t. You can find it in bookstores tomorrow and look for my interview with Robert on Forbes tomorrow. In my interview with Trump, he talks about what it takes to be an entrepreneur, explains why most entrepreneurs fail, gives some career advice tips and life lessons, and more!
What is “The Midas Touch” and why should entrepreneurs care about it right now?
It’s really about how to make money. By making money you’re also making a good life for yourself and I’ve seen so many things that Robert (Kiyosaki) has too. Robert has been a great testament to it but we see so many moves that are so wrong. It’s a complex world but we’ve tried to simplify it as much as possible, where people have a chance to make real wealth and therefore a better life for themselves.
Do you believe that entrepreneurs are born or made?
It’s a combination of both. To a certain extent you can’t take the born out of it because you’re born with a certain level of intelligence but you can also learn a lot through other people. You can learn a lot from other people’s successes, and mistakes, and I really think that there is a combination – you definitely need a combination of both. Now if you’re born with “The Midas Touch,” you don’t have to read anybody’s book because you just have it. If you are born with some talents, which is in the case of most people where they have some ability and some talent, a book like this is a necessity.
Robert Kiyosaki (co-author of “Midas Touch”) said that you’re a born entrepreneur and he was a made entrepreneur.
Robert’s told me that too and maybe he’s giving me too much credit! Robert is an extremely smart guy who really has proven to have “The Midas Touch” in what he does. You know “Rich Dad, Poor Dad” was one of the biggest selling books of all time and so was “The Art of the Deal.” So, we got together on doing this book and it’s sort of an interesting combination.
Can you name some of the biggest reasons why most entrepreneurs fail?
They tend to give up too easily. I’ve seen people that are extremely brilliant and they don’t have the staying power. They don’t have that never give up quality. I’ve always said that other than bad ideas, which is a reason for failure, the ability to never ever quit or give up is something that is very, very important for success as an entrepreneur.
Was there a time in your life when you had a business idea that didn’t work out? Do you have a story to share?
I could take the greatest deal-makers of all time and they’ve always have something that didn’t quite work out. You never want to put yourself in the position where something not working out is bigger than what you are and therefore takes you down. It’s got to be in smaller chunks. In all cases, I want to learn something from things that didn’t quite work out and learn, so that it doesn’t happen again or so that in the future, you make great decisions. You don’t want to make the same mistake twice and you have to learn that early on in your life.
Can “The Midas Touch,” help job-seekers right now who might be unemployed for six months or more?
Yes, “The Midas Touch” is about life more than anything else and it will absolutely help job seekers and we had that very much in mind when we wrote it, Dan.
What are a few of your tips for job seekers right now?
As someone who has established a global brand, what recommendations do you have for others who want to do the same?
I had the fortune of buying great locations. Then I had the fortune early on in my life to name the buildings after myself and I had a good name – because you know the name “Trump” is sort of a good name; it’s the winning card, there are a lot of good things that come with that name. A lot of people have a name that doesn’t work. When you can create a brand not around your name, you can create a brand about a name that you make up. You just come up with a name – lion or whatever. There are lots of good names you can come up with. You’ve got to show quality, imagination, and a lot of different attributes in order to create a brand and creating a brand doesn’t happen overnight – it takes a long period of time.
Donald Trump and Robert Kiyosaki's "Midas Touch"
When you go through the process of thinking about putting your name on something, whether it is an ice skating rink or a stage or another building, what do you look for?
I only would put my name on something that’s really good and really quality and I look to only do quality names. I’ve done deals without putting my name on them, and I still do. For the most part, I don’t like doing that – I enjoy doing the whole “DONALD TRUMP” thing. The only way I’ll put my name on something is if I think it’s really at the highest level. That doesn’t mean that you can’t make money if it’s not at the highest level – not everybody’s going to do things at the highest level. When I put my name on something, I only want it to be at the highest level.
What lessons did you teach your children when they were growing up that led to their own personal and professional success?
When you’re looking to hire someone for the Trump organization, what qualities are you looking for? If you had twenty résumés, which are the ones that are going to stand out?
I look for is somebody that has been at another job for a long period of time. I don’t like people that hop around for six months – every six months they are in a new job. That is something I look for a lot. If I see somebody that has had seven jobs in two years, I’m not interested because I know they’ll probably be leaving me pretty soon.
Dan Schawbel, recognized as a “personal branding guru” by The New York Times, is the Managing Partner of Millennial Branding, LLC, a full-servicepersonal branding agency. Dan is the author of Me 2.0: 4 Steps to Building Your Future, the founder of the Personal Branding Blog, and publisher ofPersonal Branding Magazine. He has worked with companies such asGoogle, Time Warner, Symantec, IBM, EMC, and CitiGroup.
©Mkimya Ent.
Robert Kiyosaki Says Entrepreneurship Will Bring Back Jobs
After interviewing Donald Trump yesterday, I spoke with his co-author, Robert Kiyosaki today. There new book is called Midas Touch: Why Some Entrepreneurs Get Rich-And Why Most Don’t and it’s available in bookstores everywhere! Robert is best known as the bestselling author of Rich Dad Poor Dad. Kiyosaki has challenged and changed the way tens of millions of people around the world think about money. He is an entrepreneur, educator and investor who believes the world needs more entrepreneurs. With perspectives on money and investing that often contradict conventional wisdom, Robert has earned a reputation for straight talk, irreverence and courage. I asked Robert some of the same questions as I did Trump to get the duel perspectives on entrepreneurship in the new economy.
What is “The Midas touch” and why should entrepreneurs care about it right now?
Well entrepreneurship is, I would say, the number one subject, because we talk about unemployment and every entrepreneur creates at least five jobs – bookkeeper, accountant, attorney, receptionist, etc. That’s how you really get away – that’s how we solve the unemployment problem is not by creating phony jobs, it’s by actually having entrepreneurs create jobs. That’s why it’s important today.
Do you believe that entrepreneurs are born or made? Can you explain?
I actually think that Donald was born an entrepreneur and I had to become an entrepreneur. I really had to study entrepreneurship – I became a student of it and then progressed; so it took me a little longer. Donald apparently has a lot more self-confidence than I do – that was a big factor. Plus, he went to a business school, which I didn’t – I went to a military school. A lot of things I had to learn it, which somewhat makes me a better teacher of it, not better than Donald but I can teach it.
What were a few of the things you learned in military school that help you build your business today?
In military school, on day one you must memorize the mission of the Merchant Marine Academy. I don’t remember it anymore, but the mission was everything. Teamwork was second and leadership was third. They were constantly training you to be a team player that becomes the leader and in most businesses, mission is just something they put on the wall and then teamwork is “who can I stab on the back to get to the top of the ladder.” I was in corporate America for only four years and that was enough – I couldn’t stand it. Military school was great and especially great for leadership and then I spent two years in Vietnam. If you can ask a young man to give his life for his country, you can lead people.
Can you name some of the biggest reasons why most entrepreneurs fail?
In “The Midas Touch” I cover the five points – number one is you must have strength of character, which is the thumb. The index finger is your focus – can you stay focused on a target? The middle finger is what you stand for – your brand. Next is the ring, which is your relationships. Then the little things that count and the things that you do. For example, Domino’s Pizza – pizza in thirty minutes or less and Wal-Mart is absolutely the lowest prices and they build the whole company around that. Most people don’t have any defining process – they’re not good at anything. Instead of building a company around low prices, they have sales, but that doesn’t really help the process for them. I would say the number one skill, and Donald will say this, is pressure – that’s the number one problem.
Can you handle pressure? Most people cannot handle it. It’s awesome. Number two is they lack focus – they cannot stay on track. And three, they don’t have a distinguishing brand. The Trump brand and the Rich Dad brand are worth more than the companies today. Then your relationships – you’ve got to have people skills – can you raise capital? Most people cannot raise capital. They don’t have people skills – they cannot lead people. And then the fifth one again is that they don’t have anything that really defines them – anything that is really unique that only they can do. I would say raising capital is one of the weakest things for most entrepreneurs.
Was there a time in your life when you had a business idea that didn’t work out? Do you have a story to share?
Well just recently we were looking at going into retailing because I was looking at how much retail space was coming up. Shopping centers were empty and I thought this might be a good time to go into retailing. We worked on it for about six months and it was a good idea but a better idea came along and we said okay we will go with the better idea. So we stopped. So many people have come up to me and said I have an idea and well I said “well good you better have at least ten thousand more of them” because in the start up phase you need to have idea after idea after idea. Most people can come up with one idea but that’s all you got. They lack creativity.
What would make you want to invest in one person over the next? What are some of the types of ideas you would invest in?
I don’t invest in ideas because ideas are a dime a dozen. I could steal the idea pretty quickly. There is a four-prong approach – number one I look at the project. Project is first, and then the partners. Who are the partners? Who else is going to be a part of this plan? Three – what is the financial structure? How much debt and how much equity? What’s my ROI? Four – who is going to manage it? Most entrepreneurs can’t answer those questions. All they have is this idea.
Just recently I bought five golf courses and a major resort here in Arizona. The guy walked up to me and said I want you to be my partner in this. So I said “okay, okay what’s the deal?” He said it was a major golf resort in Arizona with five golf courses in a prime location. It took less than ten minutes and that was it. He answered all the questions. The problem is most people don’t build the business; they build themselves a job. They’re self-employed and that’s the problem. Businesses by definition must have integrity. Integrity means it just holds its shape and it can operate without you. If the business needs you, it doesn’t work. If Donald shut Trump down today, it would still work. If I shut down Rich Dad today, it would still work. If I am a dentist and I stop working, then money stops too.
As someone who has established a global brand, what recommendations do you have for other people who are looking to do the same?
I always say to become a student. If you want to be an entrepreneur, you’ve got to become a student immediately. Most people lack the vital skills it takes to be an entrepreneur. You can never stop learning – my wife and I just came back from a week-long seminar and because we’re always studying. The people who fail are the people who don’t want to study more – they think that all the answers are in their head. One of the benefits I have is that I’m always in seminars, which is how I met Donald. It’s the biggest secret that we have. But unfortunately most people, even coming out of business school, really don’t have the others skills that are required for entrepreneurship.
Most people coming out of an MBA program have those skills to be an employee and climb the corporate ladder, but they don’t have those skills to be an entrepreneur and start a business. One of those skills is handling pressure. How long can you operate without money? Can you raise capital? What are your people skills? And who’s your team? Those are really basic questions. A lot of times I notice with small business startups is the ring finger. They start with the wrong people and then business falls apart and they have to get rid of the bad partners before starting the business again. It’s part of a process – it’s not about getting rich overnight. I met a guy today who said that he went without a paycheck for thirteen-hundred days. I only went 400 days without a paycheck.
Is now is the best time to be an entrepreneur?
Oh yes, it always is. I was listening to Steve Case, who started AOL and he was on CNBC. They asked him what he thought about all the government regulations. Steve Case said if you’re a true entrepreneur, government regulations will never stop you. A lot of people let little things stop them as a way of saying that. So good economy, bad economy, it’s always a good time. It’s especially easier today because I always tell the young people, when I started out I needed to carry loads of quarters so I could use pay phones. Now it’s cell phones and the web – it is so much easier to be an entrepreneur and interest rates are so low!
When I was an entrepreneur, it was 12%. It was tough to borrow money because then I had to promise 20%. All an entrepreneur is doing is solving a problem. See a problem, solve it. Everybody could be an entrepreneur and everybody should be an entrepreneur. You really have to have the Midas Touch. If what we say in the book scares you, then you probably don’t have it.
What do you think about someone having the Midas touch later in life? Does age even make a difference?
I don’t think so. The greatest story of all is Colonel Sanders. He didn’t start until he was sixty-six on a freeway bypass for his chicken shop. Anything is possible! I think you know in your soul if you’re one or not. You may not have the skills yet but it’s really about the spirit. When I was in military school, it was always the mission first. Then I went on to become a pilot for the Marine Corps and again and it was still the same mission. So what’s the mission of your business? Are you willing to give your life for it? In the Marines it was very clear. I asked a lot of young men to die for their country, including myself. I was willing to die for my country. Most employees only want to know how much they get paid and how much time off they get – they probably don’t have the mission in their souls.
Dan Schawbel, recognized as a “personal branding guru” by The New York Times, is the Managing Partner of Millennial Branding, LLC, a full-servicepersonal branding agency. Dan is the author of Me 2.0: 4 Steps to Building Your Future, the founder of the Personal Branding Blog, and publisher ofPersonal Branding Magazine. He has worked with companies such as Google, Time Warner, Symantec, IBM, EMC, and CitiGroup.
Donald Trump and Robert Kiyosaki's "Midas Touch"
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