John Warrillow (who spoke at the Built to Sell event that K&H are promoting) recently posted a blog summarising his interpretation of the four key lessons from reading Forbes magazine’s recently published annual list of the 400 wealthiest people in America.
The list offers lessons for all entrepreneurs, especially the top 20.
Here are John’s four key points from this year’s list:
1. Choose entrepreneurship as your career
Owning a business is the single best way to become rich in America. Study the top 20, and you will see that all 20 people became wealthy through their ownership of a business. There are no rock stars, bank CEOs, real estate agents, movie moguls, writers, baseball players, stockbrokers, doctors or filmmakers in the top 20.
2. Start a technology company
If you’re going to start a business, you may want to make it a technology company. Eight of the top 20 — Bill Gates, Larry Ellison, Larry Page, Sergey Brin, Michael Dell, Steve Ballmer, Paul Allen and Jeff Bezos — are founders or co-founders of technology businesses.
There is one information publisher (Michael Bloomberg) in the top 20, three moneymen (Warren Buffett, George Soros and John Paulson), one casino operator (Sheldon Adelson) and four people who gained their wealth from retailing, all from one family and one business: Walmart. Yet almost half of the top 20 list are technology company founders. There is simply no moneymaking substitute for a business in which the marginal cost of producing each new widget is next to nothing.
3. Start early
Entrepreneurship is one of only a handful of careers for which it doesn’t matter how old you are, where you come from or what prep school you attended — which is why, at age 37, Google founders Sergey Brin and Larry Page are richer than Sheldon Adelson, who is more than twice their age, at 77.
4. If you inherit money, don’t blow it
A full seven of the top 20 got their money by being born lucky. Christy Walton, Jim Walton, Alice Walton and S. Robson Walton are winners of the Walmart lottery. David and Charles Koch got their start from their father, and Anne Cox Chambers’s late father founded the cable company that bears her name.
The other thing you’ll notice in scanning the top 20 list is that many of the wealthiest people in America are working hard to give their money away as fast (or faster) than they made it. Warren Buffett, Bill Gates, Larry Ellison and Michael Bloomberg have all pledged the majority of their wealth to charity, which suggests that although money may have been a motivator or score card for these entrepreneurs in their earlier years, pure moneymaking has given way to something more meaningful now, which is perhaps the biggest lesson of all embedded within the list.
See here for John’s original post on this subject. John presented his ideas on how to build a saleable business on Tuesday 7 December 2010.