First, you should be skeptical of a real estate guy talking about technology. After you apply the appropriate level of doubt and cynicism while you read this, I hope you gain something from this and think about how it applies to your own life.
Like many of my fellow Generation X’ers, I grew up when Silicon Valley was finding its legs. This was the era when the cool kid on the block had a Commodore 64 to play games on. And when IBM clones or word processors became something that could be bought at Office Depot; and yes, we got one. In reflection, it seems like every computer that I have ever purchased cost $2,000.00. If we were to do a quick comparison between then and now, today’s computers are dirt cheap. In the early to mid-1980’s all you could do on these processors was your English class essay and play solitaire. Now you can create a billion-dollar business from your dorm room. Wow, what a difference two decades can make. As Bill Gates said, “Most people overestimate what they can do in one year and underestimate what they can do in ten years.”
In today’s world you can start a global enterprise that networks with an infinite number of customers and partners. You don’t even have to be in the same time zone or living on the same continent for successful business to happen. As Robert Metcalfe’s law states, “The effect of a telecommunications network is proportional to the square of the number of connected users of the system (n2).” Using Facebook to illustrate what this means; the more of your friends that are actively on Facebook is the more valuable it is to you. Metcalfe’s law along with Moore’s law, which simply states “the observation that the number of transistors in a dense integrated circuit doubles about every two years.” These two laws, which arguably could be called, only observations, really have changed the world. This new world with these new laws in play, gave Steve Jobs the creative space to bring forth the iPhone; the epoch of the current age.
I recently read a couple of technology books, “The Four, The Hidden DNA of Amazon, Apple, Facebook and Google,” by Scott Galloway and “Life After Google, The Fall of Big Data and the Rise of the Blockchain Economy,” by George Gilder. In my next blog we’ll take a look at Gider, but today I want to focus on a few of quotes from “The Four, The Hidden DNA of Amazon, Apple, Facebook and Google,” Read these books!
The first quote that caught my attention was, “I hope the reader gains the insight and a competitive edge in an economy where it’s never been easier to become a billionaire, but it’s never been harder to be a millionaire.”
My takeaway from that quote was whatever you choose to do in life, in business, don’t be average. And as Peter Thiel would say, “be a non-consensus thinker.”
The second quote was, “Walmart was the great leveler. But most consumers don’t want to be equal; they want to be special.”
This is true of people across the board. They want to be special and treated that way. And this creates a retail conundrum. People want inexpensive and uniqueness, but low priced and special doesn’t exist. Special in the retail world is usually synonymous with exclusive and expensive. If you can deliver value, cheaply, you have scale. Scale creates profit. See the first quote.
My third quote states, “The truth is that the death of physical stores has been vastly overstated. In fact, it’s not the stores that are dying, but the middle class-and, in turn, the businesses that serve the once-great cohort and its neighborhoods.”
This statement floored me. And it’s one of the most interesting paragraphs in his book. As a former retail real estate person, I think he’s right on with this. We will always have physical retail stores. However, we will just need less of them. An integrated internet and physical location strategy seems to be re-energizing the sector, but it is not a broad-based resurgence. Only the best locations, providing the best mix of tenants who are technologically savvy and synched with the times will be viable. Everything else will approach zero. Zero in technological terminology is asymptote, which basically means it will come very close to being zero but will never actually be zero. Many “in the trenches” real estate people are holding on to the belief that “We’ll always need shopping centers.” This statement is true. However, we may not need, your shopping center.
Any percentage reduction of shopping centers will equal billions of dollars in lost real estate value. Perhaps not this year, and maybe not for a few decades, but this is coming. Anything that is commoditized will have an option of being delivered to your front door. All you need to do is check the exponential growth of Amazon Basics. Galloway does offer a counter balance statement, “It wasn’t the iPhone, but the Apple Store, that defined Apple’s success.”
Quote #4: “As J. Crew chairman Mickey Drexler points out, “It’s impossible to compete with a big company that doesn’t want to make money.”
Obviously these companies want to make money, but the enormous amount of investor capital that continues to flow into their bank accounts gives them the ability to constantly invest in their business models, regardless of profit, until they attain enough paying customers to scale their way to cash flow positive. The book has a long discussion on the virtually zero cost of borrowing money that Amazon, Google, Apple and Facebook take advantage of. Simply, their sky-high valuation of their earnings gives them a blank check to wage war on the marketplace. When $1 of earnings equals $350 of market capitalization, then the money is basically free. This won’t be technically right, but directionally, Amazon is the most dominant monopolist the world has ever known. We, the consumer just don’t care, because we like our stuff cheap and delivered to our door. Really, they (mostly) deserve the money because money flows to where it can be best used. If a monopoly means you are the best at what you do, you have earned your place at the top.
However, the extraordinarily difficult process and cost of being a public company, which gives you access to cheap capital, is the real culprit for the lack of innovation and differentiation from new entrepreneurs in the marketplace, plus the insane patent laws. Blame government regulations and restrictive securities laws for this. Further, let’s call the regulations and barriers to being a public company for what it is, a tax on creativity and business creation. These costs protect the monopolists and not the consumer or the investor. Yes, people lose money in many business ventures, especially highly speculative ventures, but it is their money to lose. We should be free to make money and to lose money.
Bezos wrote in Amazon’s first annual letter in 1997, “Given a 10 percent chance of a hundred times payout, you should take that bet every time.”
“Unlike every other Fortune 500 CEO, Steve Jobs punished careful thinking and history recorded the results.”
Stop playing it safe in life. That leads to the middle and the middle is being marginalized, because the middle doesn’t add value. You can build a model on being the cheapest and and you can build a model by being the best, the most expensive, the coolest and the sexiest company on the planet. The middle is dead. Choose not to be average.
I tell my kids, and everyone else who will listen, that greatness has a cost and average has a cost. Everything in life has a cost so, pay to be great.
I turn 47 in about 33 days. And I am genuinely amazed to find that I am no longer the youngest person in the group, within my company, or at many places to numerous to count, all with the exception of the golf course and jazz concerts. On a side note, I am passionate about jazz music. I play the jazz guitar and I listen to jazz. Now whether it makes me antiquated or not, I listen to jazz musicians who have been dead for decades. The movie “La La Land,” suggests jazz music is an art form worth saving and building a wider following for, but, I digress. Lately, I am having to remind myself that I am the adult in the room. In my world growing up as an only child, I was always surrounded by adults, which means I was always the youngest person in the group. Now as I look around I see that this truth has evolved into something else, it has become clear that it’s my time, as an adult to step up, step out and step beyond.
Being good at what you do and delivering the results of what you’ve promised is no less than what is expected. In fact, it’s the bare minimum. To be of true service lies beyond the spreadsheets, statistics, and big data. What we need is a conscious connection between what we want, who we are and who we are trying to become and how we parlay this into going beyond. This is what really counts in business.
Today’s inspired companies, are led by inspirational people who are inspired at every level. From the janitorial service to the new hire at the entry level to the CEO, CFO, GM and owner. There are no breaks in the chain; engaged, connected, supportive and helpful in every way, every day. No breaks! Sir Richard Branson said it best, “business has to give people enriching, rewarding lives or it’s simply not worth doing.” This multi-billionaire understands what is needed. He has always known that it’s about building relationships, based on the principles of integrity, caring, support, kindness and just being helpful. We teach our children these principles when they are young. We too learned these basic principles. And now more than ever, in this new emerging era these principles must be applied to, adults engaging in business. From the boardroom to the living room and everywhere else in between. In short, this new era dictates that we as business leaders must choose to support our employees, our partners, our vendors and of course our clients, in becoming or evolving into the best versions of themselves. As we too, become the best version of who we are.
To truly succeed in the new market reality of digital communication, social media and whatever artificial intelligence becomes, we must become more human. We cannot lose our humanity. Technology is an amazing gift, if used as an augment for building relationships. Using it to replace fundamental principles found within relationships is ignoring the reality, that people are searching for meaning and purpose. And that whoever helps them with this goal will win their trust and their business.
Building a successful business of course means making money. Believe me, creating wealth for myself is important to me. I also know, that we get what we want by helping others get what they want. And some of what they want is to belong to a group of people that they can trust, confide in and be protected by. They want to be able to live the life of their dreams, or probably more accurately, live the life they allow themselves to live. So, to add another layer, a great business with great leadership must also inspire people to be more than they allow themselves to be, or believe, and provide them with a safe environment to do that. That is inspired leadership. That is self-selected evolution. That is taking that step beyond.
John Mayer, a brilliant musician, said during a live performance, ‘that he hoped that he and his audience grew old together.’ This is part of my dream as too. And as business leaders it’s about stepping out and beyond, raise up those coming behind us, creating a solid foundation so they can continue on the path towards a better life and therefore, create better businesses with humanity intact.
PS: Listen to Miles Davis, Keith Jarrett, Herbie Hancock, Bill Evans and Wes Montgomery. Go to New York and visit Smalls and the Village Vanguard. Also read Tom Peters new book, “The Excellence Dividend.”
Until I was 17, I spent my entire Summer vacations in Montgomery, Alabama with my Sister, my Father and my Step Monster. She really is not a monster and never has been. She is however perhaps the funniest person on the planet and a world class Step Monster. The thing is, she not only approves of this fun-loving nickname…but I think she likes it. Part of my vacations was spent on a road trip to Fort Walton Beach, Florida with the family it always turned out to be a sort of quest. We’d pile into the Buick or the “French’s mustard yellow” Volvo, whose color pallet, fit in nicely with the avocado green refrigerator and orange shag pile carpet of the day, and hit the road heading south to the panhandle.
Being from Las Vegas, you see lots of things you wouldn’t see anywhere else. Hence the slogan, “what happens in Vegas, stays in Vegas.” So, at the age of 15 I thought I’d seen everything, but apparently, I was wrong. We’d always stop to buy what we needed for the beach. Now, purchasing beach paraphernalia at “Alvin’s Island” in the panhandle was, to this day a memorable experience. It was like rubbernecking, to look at a car wreck. A bad, bad car wreck. You know it’s wrong to be looking like that, but you can’t take your eyes off of the grizzly scene. It’s almost like you are hypnotized. The store reminded me of a cross between a “PT Barnum” styled freak show and a typical weekend at Wal-Mart. Weird stuff! And lots of it.
In the early 80’s Chevy Chase starred in a movie called, “Vacation.” If you haven’t seen it, it’s a must. It’s lighthearted comic relief. At one point in the movie he proclaims, “it is no longer a vacation. It is a quest for fun!” It is this idea of a quest, or the journey surrounding the quest that I want to explore with you in this blog. Our lives are a quest.
The late Joseph Campbell is arguably one of the greatest mythologist of the twentieth century. His legacy and understanding that quests are an integral part of mythology has culminated into a screen adaptation of his work called, “The Hero’s Journey.” I want to use the journey that all hero’s and shero’s must take to illustrate my point regarding the journey surrounding the quest. The diagram below lays out the hero’s journey. Consciously or unconsciously we are all on it.
I just finished reading “The Churchill Factor.” For those of you who follow my blog, you know this isn’t the first book I’ve read about this great man, but it is the most concise. Winston Churchill lived the Hero’s Journey. His narrative both personal and public fits into the diagram above. His beginning was filled with loneliness, disappointment, setbacks, rejection and public humiliation. Yet, he knew who he wanted to become and to that end, he found mentorship and the support from his wife and other true friends. In the middle of his life story, he answered his own call, his quest, and bent reality to manifest what he saw and believed for himself within the “theater of the mind.” He had a vision of himself within his mind. He did the work needed, the inspired action and he never stopped until he achieved his goal. Sir Winston believed in his gift that he would make a difference in the world…and he did. He sought greatness. He prepared, he acted, and during World War II he led his nation and the world out of darkness and into hope and then prepared all players to take right action.
Our lives unfold like a story, there is a beginning, a middle and an end. Or as in the hero’s or shero’s journey Acts I, II & III. We are all here for a purpose and we all have our own quest. Part of your quest is creating experiences, learning from them and building on them using your own uniqueness to make change within the world. You have what it takes to be the hero or shero in your journey. You are the star of your show, the scriptwriter and the director of the action. Grant Cardone said, “everything is your fault, good and bad. Take responsibility for everything and move forward.” This doesn’t mean you are alone. Ask for help when you need it. You are surrounded by allies, patiently waiting for you to take the first step in your hero’s or shero’s journey in your quest to truly live a memorable, inspiring life.
To that end, I am in Act II. I have seized the sword and I have the elixir in my grasp. My hero’s journey has brought me to the creation of my real estate brokerage and advisory company called, Bear Real Estate Advisors.
My new contact information is email@example.com 702-710-1031. http://www.bear-advisors.com In the coming weeks I will continue to connect with you about my quest/hero’s journey by sharing my experiences with you in Act III