I watched the international TV news recently and was as startled as the producers and reporters by news of the richest people on the Forbes Rich List, especially by the arrival of the world’s youngest self-made billionaire, Kylie Jenner, aged 21 and worth US$1 billion.
Jenner used her well-known family name, her great physical beauty and US$250,000 from her modelling work to start an online cosmetics company that employs no one else and is based at her home, so all her profits are hers and, I presume, the taxman’s. She promotes, markets and sells her products herself, with her mother managing the finances, according to the TV report. It is a singular achievement, because other under-25s are on the Rich List, but they are heiresses.
I have a lot of respect for people who can own and run hugely successful businesses, assuming they are not cheats and conmen. I decided to check out the Forbes magazine to glean what divides the girls from the women and the sheep from the goats.
I learned from Jeff Bezos, the current richest man in the world (net worth US$138 billion), that it is the preparedness to dare to go against the grain, to invest in something totally counter-intuitive, such as betting on people wanting to read on tablets when they could have books, or that in the US, with so many shops, that shoppers would prefer to stay at home. Bezos believes that, “Given a ten per cent chance of a 100-times payoff, you should take that bet every time.”
Few of us have that level of courage, especially when he then goes on to reassure us that, “You are going to be wrong nine times out of ten…Big winners pay for the many previous experiments.” Well, how many of us even have the staying power or the resilience, quite apart from the boldness or the gambling gene? Failing three or four times while you are young enough to pick yourself up is one thing, but you have to be special to fail a dozen times and keep going if you are still in start-up mode and you are middle-aged. Bezos' web-service risk, now worth US$190 billion, took off, but he has since had some failures.
It is interesting that Bezos made his money in technology and retail, which are amongst the top three money-spinning sectors, along with manufacturing, but that is not enough to ensure success. Thousands of tech start-ups have bitten the dust since the tech revolution began and those who survived only made it big when they listed their companies publicly.
It is worth highlighting, though, that even after an IPO some companies go belly-up. At the moment, Kylie Jenner is bucking the trend. No software for her: her commodity is soft skin, perfect features and the illusion that you could be her if you wore her make-up. I am not sure how her business could go public and retain what makes it so successful, but it shows that the key to success must be spotting a gap in the market and managing to fill it with your own unique product or service.
Describing how the big boys function, Jeff Bezos told Amazon shareholders that there are two types of decisions that entrepreneurs and executives face regularly: Type 1: those you cannot go back on (such as leaving your paid job to start your own business). These exhaust you but they need your attention at least ten per cent of your working week and demand physical and mental fitness to deal with them adequately.
Type 2: these are reversible, can be shared with “high judgement individuals or small groups,” and can be quickly made and managed through delegating or outsourcing.” Anyone reading this who has had to run a business would recognise the veracity of the analysis.
Of course, we would never have a rich list in this country, although we have thousands of TT millionaires, and at least tens of billionaires, I would guess. Yet it would be useful for financial planning and economic diversification if we conducted a wealth-mapping exercise; we might learn where the innovation and real entrepreneurship exist – it would not be in importing manufactured goods, which probably accounts for most of our rich. I would like to see how much revenue Carnival, with its myriad and ever-changing services and products, generates, because it is that sector which has been impressively dynamic and forward-looking, even to the detriment of Carnival traditions. The Carnival sector – costumes, fashion, music, food, accommodation, travel, transport, the bands, rentals, bank loans and whatever else – has surely created quite a few millionaires and, taken together, if the taxes had all been paid, made us all richer.