Well, ITAL was my first business and that was when my brother and I set up because we were unemployed so we were really looking for income which we did not succeed getting for quite sometime actually. It turns out that you have to build the business before you get the—with my first learning. What have we learned from ITAL, I learned how to do business because we’re basically buying and selling computer kit. We were fast and lose the traders on the street in LA and grew the business over a number of years but never really with an eye to building a lasting business. We are always unfortunate looking for the quick pack and so we remained the traders more than building lasting business. Having said that, if nothing else it taught me that there is nothing wrong with being deeply opportunistic, if you move very—and people are being agile. Agile is a metaphor right, it’s not real. Our company is not agile. People move and think quickly and act quickly. Essentially that’s opportunism, an opportunity arises you move quickly enough to take advantage of it. But the word opportunism sounds bad, the word agile somehow sounds good.
Okay, so what’s the difference? The difference is you’re just painting the same thing with another color, right? And there is a lot to be said for being opportunistic. Having said that, I find over and over again the people who’ve not run real businesses, who’ve not had to make payroll and who’ve not had to wake up with an inadequacy of capital. My investors frequently preach focus and they preach discipline and they preach focusing solely on the intended outcome. I think it’s a great mistake. A launch of a study was done a few years ago in the US looking at companies that had over a period of 20 or 30 years growing to be very, very large 14,500. And they track back to there earliest days and try to understand what was it about them that would then eventually—do they have attributes in common? And one of the attributes they almost uniformly have in common was the lack of a clear business purpose so it was an all businesses, they grew organically, they followed the money, they tended to grow as opportunities presented themselves without worrying too much about the specific strategy at hand. And of course this one is contrary to everything that people preach and yet my first business and many of my other businesses have grown on the back of plan B or plan C or plan X. So, I think I learned that starting at ITAL and moving on.
Even if you want to be, have a happy relationship with your brother or my brother as the case maybe then you really should, this business partner. As other advance, so I’ve never again kind of do business with a family member. What else that I wish I’d known? I wish I had known that I was sitting on top of a goldmine. And that I did not understand how to take advantage of the goldmine. And we start the business and we’re essentially selling computers but we’ve basically trade in almost any element of computer kit so we are traded in processors and MAC co-processors and memory and so. And we had the basis for actually quite equal business, they could have grown. But we had no idea but that’s what we had. And so the flip side of being it does—that it’s okay to be opportunistic is you also have to know a great thing when it comes along and then grab it and stop doing everything else and then run with it. And so, if you don’t have the ability to spot the large business in what you’re doing then being opportunistic means you will always merely be trading like we were. And ultimately the business didn’t grow into a large business. We sold it as a modest business to somebody modest and my brother went north and I stayed that south because we remained brothers since business partners.
Somebody said the money is in the exhaust and it has proved to be over and over again. The case that I’ll be focusing on this thing when all people want is that thing from the same body of pride. And so of course if you’re really bull-headed you just go yell at the customs and tell them they’re wrong which I have seen entrepreneurs do, you know firing the customers, it’s a very, very short second approach. But in large parts because you don’t know what they value, the problem with many people who are innovators, inventors in particular is they tend to focus on the innovation. When in large part, innovations in fact aren’t invented, they’re discovered. Just as pricing isn’t invented, it’s discovered, a price for a product is changing with somebody else in the market place decides its value is. And that’s decision establishes the price. You are telling them what the prices does to establish it. That establishes your desire for a price and frequently what it establishes how much you have to make in order to be a profitable business. If what you’ve have to make to be a profitable business is higher than what they choose as the price, you have an unsustainable business full stop.
It is interesting because it’s seems very obvious doesn’t it? But a price is discovered and how many people sit down and say, ask the question. What shall we do? How much shall we charge this? As though they have a choice, you should never ask the question, you should always be asking yourself. “Who can I go out and look at and understand to determine what price I am going to get for this?” All business is found to one of two camps, they either undercharge or overcharge. But there is no point in time where you charge the right amount because people either buy very quickly knowing that you’ve left me on the table or you will find that it’s really a push to get that off the door because you’re charging too much for it. There is a bond and you’re never on the money, having said that small businesses who suffer from insecurity, quite rightly. If you have to make payroll, you’d rather make enough to make payroll than not make payroll. It’s like somebody said what’s its like and how does it feel being 50 and I said, “Compared to what? You know not being 50? It feels great.”
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