Successful enterprises that stand the test of time are often the result of two people – where one side takes on risk to create something for the other, in exchange for ownership in the profits of the resultant product.
This is the fundamental essence of investing. The investor puts up their capital – be it human capital or financial capital – in exchange for a portion of the future profits.
Here’s one business example worth highlighting and celebrating, in the nation’s capital.
Mr. Lewis Shrensky learned how to perform the legal work necessary to create businesses. So he took on the financial risk of his time and effort to create a biz for an economically disadvantaged client, in exchange for part ownership in the enterprise.
This is most admirable. While he probably and likely made investments into numerous businesses, Mr. Shrensky obviously realized while he was a young man, that tremendous success can be attained personally and for an entire metropolis of people, when investments are made into talented economically disadvantaged people.
Mr. Jose Rodriguez learned how to do construction work, but didn’t know how to create a business. So when he was early in his business lifecycle, he was willing to share a portion of profits with someone who had the knowledge of how to make what he needed for his enterprise to get to the next level.
That was many years ago – 1972 approx. Mr. Shrensky used his valued skills and knowledge at that time, to create a useful high value product for his client. Fast forward to today, and their enterprise is one of the most successful and long-standing government contractors in the capital city of our great nation.
Mr. Shrensky said in his interview that he was “kinda starving” at the time. Meaning, he was young, hungry, and full of talent. Still, he was willing to invest his time into good a “opportunity” if it came across his desk.
Certainly, people with top skills that which the economy places great value, may be able to invest their time wisely when the ‘opportunity’ for partnership arises, and they’ve identified an honorable and visionary business partner who may not have the financial resources to afford the services.
For every Kanye West, there’s a Damon Dash and Sean Carter.
For every Bill Gates, there’s a John Opel.
Within these successful ‘marriages’, we find a skilled creator who takes on risk to make a product, to be used by a top executive.
But for the partnership to work effectively, there must also be a top executive(s) who is honorable and keep their word to the talented people who invested their labor and talent. That business executive must be honorable to the people who worked diligently only with the ‘dangled carrot’ that future profits would be made available at some point in the future. Then, they put their heads together to jointly make business decisions to advance their mutual business interests.
What a wonderful story of success in business. This is how it works.
Of note, Mr. Rodriguez said very specifically what is his “secret” to achieving success in and operating a long-lasting business. His words: “keep your word“, and pay people what you promised to your vendors and partners. His only secret, is to keep his word and pay what you promised. AKA, be an honorable executive.
On a cursory search of the internet, there are no public records of Kanye filing lawsuits against Sean Carter or Damon Dash, executives at Roc-A-Fella Records – and why are there no records of such lawsuits? It is because Mr. Carter and Mr. Dash have both been honorable businessmen, who kept their word to Mr. West and paid what they said they would.
Similarly, on a cursory search of the internet, there are no public records of Bill Gates or Microsoft suing John Opel or IBM, which is a testament to the trustworthiness of the top executive John Open at IBM.
In some of the greatest business enterprises, they fundamentally began with people who have had creative talents and were willing to take on risk to offer their services. Similarly, while their talent is needed, the willing partnership of honorable executives is also absolutely essential. Without both of these components, business cannot meet its fullest potential and success will be short-lived.
This is applicable across industries: from the arts to engineering.
A simple formula for all-star levels of success:
Either you may, take risk and identify someone who is willing to be honorable. Or conversely, commit to being honorable and find someone who is willing and able to take on risks.
Both are probably hard to find. But when these stars align, expect great things to come.