Published in the San Diego Union-Tribune, March 7, 2016
My wife, Ms. Bry, and I have been writing this column for more than four years, and we have never, not once, entered into the field of politics. Well, like all good startups, I am going to do a mini-pivot.
I recently watched a documentary on “Citizen Trump,” and regardless of your political orientation (I am a Democrat), I think there are some marvelous entrepreneurial lessons to be gleaned from parts of his career. I am going to mind-meld pieces from a Harvard Business School article on lean strategy by David Collis and mix it with the Oscars and see if we can learn something valuable.
1. The entrepreneur’s challenge is called “the pursuit of opportunity without regard to resources currently controlled.” The Donald was the master at that – he convinced the politicians and the banks to back his visions and deals long before he had the resources. At the beginning, he did not have real strengths in terms of financial capital, but he had perceived strengths. People do not want to follow; they want to be led.
2. Big ideas are not always apparent. The movies about Harry Potter and Star Wars were initially rejected. The Penn Station rail yards had sat vacant for more than 15 years before The Donald had a huge idea.
3. He created a brand. All companies need to stand for something. That is the core of your brand. It is created in part by public relations, but you are known primarily for what product and service you deliver. Trump stands for luxury lifestyle, Nordstrom for customer service. And the greatest brand in the world – obviously, it is President – so why not?
4. The Catholic Church is a brand. The movie “Spotlight” shined its light on it. Painful. Brands can disappear – Blockbuster, Loehmann’s, and Borders, etc. And then there was MGM – now a mere wisp of its former self in a Century City high-rise. No longer a studio. The truth is that even if Trump loses the nomination or the election, he has won in terms of brand extension.
5. The opportunity cost of doing A is that you cannot also do B. Trump admits publicly that his decline in the late ’80s and early ’90s was because he began to actually believe what Forbes once wrote – “that everything Trump touches turns to gold.” He began to believe his own hype – and it cost him millions. The single best piece of advice for any entrepreneur is this – know what not to do. There are 287 actors in Hollywood who would like to take back at least one of their films. What not to do is not so easy to know in advance, but in the rearview mirror, there is often much wailing at the wall.
6. Prioritize. One of my partners came in the other day and said our company has only enough money until July – and he is calm. He assumes we will raise some more – but now his total focus is on sales. Get customers – which means the new software release has to wait. Prioritize – it helps raise money. And it keeps you from wandering off the reservation. Decisions are interdependent. The limiting factor is time.
7. Choose a viable opportunity. If the opportunity is not truly sustainable, the entrepreneur “does everything possible to minimize long-term commitments and maximize the gross margin and sales, while looking for an exit.” In other words, movies with no big stars sell the foreign rights fast and go immediately to DVD. In Trump’s case, if a particular dog isn’t going to hunt, then license the name and don’t put up a dime.
8. I have to confess that I attended a promotional session of Trump University in San Diego five years ago. There were 450 people in the audience for a real estate/stock market get-rich-quick full day session with multiple speakers. I learned “what Wall Street doesn’t want you to know.” I wondered if anyone from Goldman Sachs was in the audience as a spy.
9. “A firm (or a film) evolves as the result of incremental choices made every day.” Key word is incremental. No Samurai sword-waving – use a scalpel.
Rule No. 458
The Academy Award winner in 1976 was “One Flew over the Cuckoo’s Nest.” Déjà vu all over again.