The Small Business Growth Strategies of Tycoons
Let’s get down to how tycoons make money in the deal-maker’s game of buying and selling companies. The big pay day comes when a company is finally sold. To sell a company at a profit requires that you increase its value while it’s in your possession. (Value creation is an ongoing topic in this course.) Increasing value entails growing the business to increase its value. In other words, you want to “fatten up the hog for market,” as they say in the agricultural industry.
Let’s take a look at why bigger is better when it comes to business.
History Channel’s The Men Who Built America
This looks like it’s going to be a great series. On Tuesday October 16 the History Channel premieres The Men Who Built America. It’s a series about the great tycoons of the 19th century: Rockefeller, Carnegie, Vanderbilt, Morgan, and more. It will use actors to dramatize events. I look forward to it.
I also recommend the western series Hell on Wheels for anyone interested in this period because one of the key characters in it is the man who built the eastern half of the transcontinental railroad, Thomas ‘Doc’ Durant. For anyone interested in reading about these characters, I recommend The Robber Barons.
Canadian Guy Laliberté was a street busker not all that long ago. He was earning a living as a stilt walker and fire-eater in Montreal. Today he is the founder and CEO of Cirque du Soleil and has a personal net worth of $2.6 billion (US) in 2012.
John Malone Overtakes Ted Turner as America’s Largest individual Land Owner
Both of these men are on my list of top tycoons to study. Both competed and collaborated for decades in the cable-TV industry where they did deals both big and small. Malone is typical of the men covered in The Tycoon Playbook. They all had the patience and discipline to start off small and build an empire one step at a time. Malone earned a Ph.D. in operations research from Johns Hopkins in the late 1960s and then joined General Instruments Corp., which was part of the cable-TV industry. After quickly becoming dissatisfied with the company’s management he took a major gamble by quitting and moving to Denver where he accepted a 50% pay cut for the privilege of working for a startup teetering on bankruptcy owned by a Bob Magness. The company was Tele-Communications Inc., which later was renamed TCI.
Tinkham Veale II
The world lost a great tycoon this past week. Tinkham Veale II was 97. Mr. Veale started back in the 1960s and built a huge conglomerate from an office in a stable, as legend has it. By the mid-1990s, his empire enjoyed sales of over $10 billion and employed 36.000 people. He was both a wealth and job creator. Sadly, too many of today’s so-called tycoons only know how to create wealth by destroying other people’s jobs.
The Veale Growth Strategy
Here’s how Mr. Veale grew his empire.
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