I love biographies. They are some of my favorite books to read. I feel that you get so much actionable knowledge out of them.
The Real Deal from Brick Lane to Dragon’s Den is the biography of James Caan who was a cast member of the TV show Dragon’s Den which is the UK version of Shark Tank. I remember exactly buying this book at an airport along with the Wake Up And Change Your Life book by Duncan Bannatyne which was also a cast member in the UK Dragon’s Den TV show.
For one reason or another a few thing always stuck with me from this book. One is that someone else has the answer to any question you ever have. So ask away, and get better at asking. The second thing is the amazing Pall Mall office building story and the third thing is that you can still get a proper butler in London.
Observe the masses and do the opposite.Preface
if you study the world around you and ask the right questions, the decisions make themselvesPreface
They were often very funny, making sales by making people laugh.p. 6
From an early age I absorbed lessons and information that others would go to university to acquire.p. 7
“win-win” formulap. 7
the art of success was making the other person feel as if he’d won.p. 7
Successful business is not about good transactions, it’s about good relationships.p. 8
when I invest in a business, I actually invest in the person leading that business. If they don’t have that dream, if I don’t feel their passion, then it doesn’t matter to me how good their financial forecast is.p. 19
I really like the idea that my pay was incentivised
. . .
the downside of sales is that if you don’t perform you’re out. You’re only as good as your last month.p. 37
In effect, Clive was creating a business out of nothing.p. 38
If you’ve got nothing to lose, it’s amazing what you can get away with.p. 43
It had been one of my strengths always to recognise my weaknesses, and another of my strengths is being able to find people like Penny.p. 51
The meetings were very boring, so I didn’t learn anything, which in turn meant I stopped paying attention.p. 51
The secret in getting him to give up his security was to understand what he really wanted out of life.p.54
if you start a conversation with a series of statements that you both agree on, it sets the tone for the rest of the conversation: I was building rapportp. 55
‘If you want to make big money there has to be an element of risk and reward. Would you describe yourself as safe? Are you OK with taking a risk?’
Of course, in the right candidates this kind of questions provokes their fighting spirit and allowed me to be sure that they had what was needed.p. 57 Filtering candidates
It was my job to make sure that candidates were confident that they could achieve what I was telling them they could achieve, and one of the ways I did this was to introduce them to a member of the sales team.p. 57 A member that was already finding success, so it was social proof at it’s best
Tom had shown me that if there’s enough gain, people are willing to risk a little pain.p. 58
Reid Trevena was an early example of the brokerages and financial services firms that came to epitomise the 1980s, and everything the company did was designed to make the employees sell more policies. Tom and Len arranged for motivational speakers to come and address the team; there were sales charts on the walls so that consultants could compare their performance against their colleagues’, and every time they made a sale they had to ring the sales bell. And when the bell rang, everyone had to applaud, even if we were in the middle of a call ourselves. The atmosphere in this place was awesome, the place was always buzzing, and the noise was incredible. Every day someone would walk in with a new suit, a new car, a new gadget or a tan from a long-haul holiday: these were dynamic, hungry and confident people, and that environment spurred the team on to greater sales figures and bigger incomes.p. 59 Sales Team Spirit
Everything about you is like a shop window – how you look, how you sound, how you present, how you walk, how you speak, your hair, your briefcase, your watch – everything about you becomes the window display.p. 59 A bit of an outdated concept but it depends on your target audience and what the market demands are
I stopped seeing these things as purchases, but as part of the investment in ‘me’.p. 60
I realised that what I was witnessing was a group of people talking their way to a fortune. […] huge sales machinep. 61
I reviewed my performance clinically.
I compare the process to something top sports professionals do. Take Roger Federer. Why is he a better tennis player than anyone else? It’s a combination of talent, practice and analysis. If you play tennis for an hour a week, maybe you hit the ball 250 times. But imagine you play eight hours a day: how many times are you hitting the ball now? When you play that much, you learn that if you hit the ball in a certain way, or to a certain part of the court, you get different results. The slightest change in technique can mean the difference between winning and losing, and if you analyse every stroke then you teach yourself what works for you. And that’s all I did: each call, each interview, each pitch was thoroughly analysed.p. 62
At Reid Trevena I was selling someone an opportunity.p. 62
getting people to believe what was possiblep. 62
dig deep into their inner sense of security, their aspirations and ambitions.p. 63
make people realise those feelings existed within them […] and then show them the journey that could fulfil them.p. 63
not to rush them into a decision: it had to be theirs, not minep. 63
I wouldn’t discuss anything about the job until I’d found out what was bugging her.p. 64
referrals techniquep. 65
‘So are you married, have you got brothers, sisters? Yes? What does your sister do? She’s a doctor. Wow, that must be fascinating, tell me about your sister . . . ‘p. 65 Be curios
all I ever did was ask questions. That’s the only secret. I’d learned that whatever it was in the world that I wanted to know, it was already in someone else’s head. I just had to ask them. […] Seriously, all you have to do is ask.p.67 Ask, ask, ask.
the recruitment industry was seriously lacking in sales skills.p. 68
I knew that you should never answer a question directly. You should always ask a question yourself until you understand what’s really being asked.p. 77
For me to marry a woman who wasn’t strong was an absolute no-no: it just wouldn’t have suited my character.p. 81
I remember Aisha asking me to mow the lawn, and eventually I found time to do it. […] When I was about a quarter of the way through, I had a bit of an epiphany.
‘How much is this job worth?’ I said to myself. ‘About £5 an hour. How much am I worth? A lot more.’
. . .
from that day to this I haven’t even hung a picture. My skill, I realised, is in knowing where to find a man who knows how to hand a picture much better than I do.p. 95
taking the sales skills and energy levels of Reid Trevenap. 97
if you didn’t have a unique selling point, a USP, then you were going to be dead in the water.p. 97-98
observe the masses and do the opposite […] doing the unexpected brings the rewardsp. 102
Someone once told me that the definition of insanity is to do more of the same thing today that you did yesterday and to expect a different resultp. 106
I was doing it all on the phone in a broom cupboard. That feeling of creating something out of nothing is unbeatable.p. 108-109 The same goes now-a-days when you can do everything from the comfort of your own home via the internet
all I was doing was asking questionsp. 109
that magic moment when I’d realised all I needed to do was to see things from the clients’ point of view and tell them what they wanted to hear, I never looked back.p. 109
Would you recommend me to three people? It was a technique I’d learned at Reid Trevena: you should always be specific. […] If you ask a specific question you tend to get a specific answer.p. 113
When you are so specific in what you ask for, the mind is very good at tuning in to somebody. Our brains start filtering through our memory banks in search of matching information. The trick is to give the brain something to look for.p. 113
I’d realised I’d been too hasty. I had gone straight to the destination and forgotten to take her on the journey.p. 116
success would come through building relationshipsp. 117
what our clients and candidates really wanted.p. 118
my willingness to ask more questions than anyone elsep. 119 in a sense gathering more data; more data with which you can make better decisions. Everything is a market, even the relationship between the two people, and the less you know about a marker the risker it becomes.
everything I wanted to know was in someone else’s head and all I had to do was ask.p. 119
I had learned that the single biggest reason why most people accept job offers is because they like the person who interviewed them.p. 120
I assumed that lawyers, accountants and bank managers were there to help. I was wrong; they’re there to make money.p. 121
What lawyers do is draft documents based on what you tell them.p. 122
As the owner of a small business, unless you understand each component of your business, it’s virtually impossible to get it to work as a whole.p. 126
I was learning that if you offer recognition before it’s asked for, it has twice the impact. […] Recognising the team’s contribution – even their potential to make a contribution – was something I was good at, and it made for a great atmosphere because everyone felt valued.p. 128
The more you talk to people – the more questions you ask – the better informed you arep. 129 again meaning more data that you have
I knew they had a need, so I just had to find a way of making it work.
. . .
I realised I must have the wrong pitch
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‘Would I pay six grand to buy £150,000 worth of revenue? I think I would.’
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I could almost work out word for word the conversation they were having at their end
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it hadn’t even existed as a concept.
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Whenever you’re in a market where you’re the only one, it’s like being ten times bigger than you really are.
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my dad’s philosophy about the less travelled road being paved with goldp. 131-132 talking about the rec2rec market
The average cost per hirep. 136
one area of my career that gets the most attention is how I turned Alexander Mann from a boutique into a corporate organization. […] if you move too fast your overheads can gobble you up, and if you move too slowly your competitors can steal your thunder.p. 141
control freaks […] there were going to be some areas of the business that I would have to let go of.p. 141
did I think the changes I would be free to implement would earn more than I could be billing?p. 142
Alan Sugar […] Dallas and Dynasty […] There was a culture of thinking big.
Don’t listen to your friends; don’t read what the papers say: just look at the facts and asses what you really want.p. 143 in other words looking to maximize objectivity
I knew that if I was going to build the business I had to learn: that was my job now.
. . .
seeing patterns in our billing, our costs and our margins was a revelation.
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how much it really cost me to hire someonep. 145
everything was an investment in the future, and, when the staff saw where the money was going, their enthusiasm and motivation went up.p. 146
My philosophy of giving recognition before it’s asked for […] I had given him a tangible target to aim for and he raced towards it.
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my dad’s maxim of always doing the opposite
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What are the chances of me giving him that car, and him turning round in twelve months’ time and saying: ‘James, I’m really sorry, I had a shit year . . .’ That just wasn’t going to happen: there was no way he would ever give that car back to me.
. . .
because Mike was billing at such a prolific rate and everybody else tried to catch up.p. 148-149
the idea of owning a recruitment magazine started to appeal.p. 149
set up a conferencep. 150
I was pretty shocked at how differently things worked in Pakistan – it was all about personal contacts rather than institutions, and you turned to friends ahead of the authoritiesp. 159
the only way I found to unwind was massage.p. 160
every so often one of the really able consultants would not only resign and set themselves up in competition, but they would take several members of staff with them, not to mention a few clients. Emotionally, I found that very hard to deal withp. 162
Two of my other managers were also womenp. 163
Things change all the time when you run a business. Virtually every day there would be a mini crisis or a new situation I would have to face up to.p. 163
I had learned that everything I wanted to know was in someone else’s head and I just had to keep asking questions until I uncovered the information I was after. My strategy was – and still is – just to say ‘How does that work?’ until I found the nugget I need to make a decision.p. 164
I am very comfortable asking questions and I don’t have the kind of ego that worries about whether people think I’m smart of not.p. 164 Don’t be afraid to be curios
When I knew what people really did for their fee, I could make an informed decision
. . .
they’d already told me what their costs were, I’d worked out their margin so I knew how hard I could bargain.
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my negotiating position changed depending on whether I was negotiating for a commodity or a service.
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The other thing I learned to do in negotiations was always to ask one final question when we shook hands: Are you happy with that deal? Mostly, people said they were.
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when you ask this question, the answer you get is very rarely about money. It might the timing of payment, or the deadline for delivery, or a clause that allows for renegotiation after a certain period.p. 164-166
I let my personal disinterest in computers affect my business.p. 166
I know it’s tough. If there’s anything I can do to help, just say.p. 168 talking to employees who just were not performing
I decided that what I needed was a general manager, someone who could take care of the day-to-day stuff.p. 171
The recruitment industry is a mirror of the economy as a wholep. 172
I had never experienced a recession before and had no idea how you ran a business in such a climate.p. 173
I found myself in the very strange position of driving a Rolls-Royce and living in a mansion but I wasn’t making any money.p. 174 cash-flow is king
If I had been a mature, experienced property investor I might have had the inclination to say it was a good time to buyp. 176
ride it out. Don’t expect a lot, don’t expect a great year, batten down the hatches, cut your costs as much as you can and just ride it out.p. 178
I had gone from being really quite depressed to being fairly optimistic: I was beginning to understand that I do well when I’ve got something to prove.p. 178
One of the benefits of paying people on commission is that if they can’t earn the commission they generally leave for a job that pays more basic.p. 178
keep our eyes peeled for opportunities and hang in there.p. 179
They appreciated being told how it was; it made them feel it was their company, too.p. 179 related to the team that was left after the recession
I was a different sort of person after the recession
. . .
I was determined to build a bigger, stronger, better company, something that could capitalise on any opportunity the new economic cycle created.p. 181
the guy who’s great at getting a business from nought to £1 million isn’t always the guy who can get the business to £10 million, and the skills needed to get a business from £10 million to £100 million are completely different again.p. 183
I knew I needed someone who could develop systems and procedures that could be replicated whether I was part of the set-up or not.p. 183
I thought my experience was more valuable in business in general than it was in one specific sector.
I had learned that I was good with people, at managing and motivating them, and I knew how to drive for profits. […] I trusted my assessments of people. […] I started to wonder what could happen if, rather than finding really talented people then placing them into a job, I backed them to start a business of their own. The business could be their idea if they were passionate about it, or an opportunity I had spotted.p. 184
private financep. 185
I kept questioning him until I had got to the bottom of his reservations.p. 185 regarding Jonathan’s reservations about a new job
For ten years I had been so wrapped up in running my own business that I had never really looked at how others ran theirs.p. 192
I had learned that hanging out with able and dynamic people rubbed off on me and so I took the opportunity to join.p. 195
No matter what stage you’re at in life, having a support network of allies is incredibly valuable.p. 196
its real business was in franchising. They taught people how to headhunt, helped them set up their own operations and then took a percentage of the franchisee’s profits.p. 198
master licencep. 198
‘Doug, let me ask you a question. How long have you been with MRI?’p. 199 Most people are a “salary man.”
‘Did you get any equity in the business?’
‘No, I’m corporate. A salary man.’
If I buy a master licence, MRI owns the brand. I want to own the business, Doug, I want to own the brand.p. 201
a logo and other corporate identity material […] when you’re selling a franchise the brand is an extremely valuable part of the franchise package.p. 202
Franchises generally work like this: franchisees pay an upfront fee and then a percentage of future profits to the franchiser.
His pitch was this: we find people who want to open their own headhunting business but don’t know how to do it. They pay us for the training, and we supply them with manuals and video coaching and branded materials, from invoices to business cards. We tell them the best kind of office to lease, the best way to find clients, the best way to get referrals: everything so that they can replicate the success of MRI or Alexander Mann.p. 203
The detail was incrediblep. 204 referring to the details of the manuals for franchisees. Just because something is obvious for you, does not mean it’s obvious for someone else.
‘Why don’t you like school any more, darling?’p. 208
‘It’s just really boring.’
I would go into a board meeting with a jotted pad, but Jonathan would arrive with a board pack – P&L, operational reports, strategy papers. Everything had outcomes and objectives attached to itp. 217
I decided to introduce a stock option scheme that gave employees a stake in the company.p. 221
after a couple of years Humana was producing the most amazing revenues in royalty payments from the franchisees. The income was spectacular, and it meant I could use some of the profits to invest in other ventures.p. 222
just how powerful my strategy of backing people to run their own businesses could be. If I found the right person and motivated them the right way, I would create a much better business and have a far more lucrative investment.p. 223
gaps in the market that might be exploitablep. 223 There are always gaps in the market to be exploited
in many cases my experience was more valuable to these new ventures than my capital.p. 224 experience can represent huge leverage
That predictable level of income meant it was very attractive to potential investorsp. 225
Pretty much everyone I backed was a sales expert.p. 227
As my reputation as an investor grew, people started coming to me.p. 227
I back people not businessesp. 227
I reckon I rejected 80 per cent of the ideas that came to me.p. 228
private equity firms […] AOL had leveraged its market valuation to buy much bigger, and much more profitable, Time Warner.p. 228
A hundred million in cash I would have taken, but that wasn’t what was offered.p. 229 They offered equity
We agreed a deal that gave him a percentage of anything he got me above the original offer.p. 238
Although I had been wealthy for a long time, my wealth had been in assets not cash. For the first time in my life my bank balance reflected my status as a millionaire and I found that quite excitingp. 238
tied the money from Humana up in a bond for twelve months.
. . .
You only have to look at Mike Tyson, or Michael Jackson is perhaps a better example, to see how a vast fortune can simply be spent.p. 239
non-competition clausesp. 251
I was free nowp. 252
serial entrepreneurp. 256
Barbara Hutton, the Woolworth’s heiress who inherited £50 million in the 1920s (which must be several billion in today’s money) and died penniless.p. 258
how tiny clauses in deals have huge pay-offs – like Intel’s insistence that any computer manufacturer who used their chips had to include their name in the advertising of their products. I found out how you lead a really big company (it comes down to having a clear vision and being able to communicate it to people who execute it)p. 264
oddly, the stock market impedes the growth it demands that companies produce.p. 265
If there’s one single thing Harvard did for me, it helped me to start to think long-term.p. 266 in a free-market system favors those who can think and plan long term
My phone rings off the hook: every minute is accounted for.p. 277
in Pakistan it is customary to go straight to the top with any problem. In the UK, the chairman of a company is protected by lawyers of receptionists, PAs and lieutenants, but in Pakistan the chairman is completely accessible.p. 281 Again a reason why so many companies fail to adapt to what the market demands. The top guys are disconnected from their customer base and they don’t have any skin in the game
That old saying, ‘It’s not what you know that counts, it’s who you know’p. 283
commercial investments . . . supporting the economy is better for the country than simply handing out money through charitable initiatives.p. 283
Imagine you won the lottery. Say you won £10 million. What would you do with the money?
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Is that the best return?
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What could I do with my money that would change my life?p. 288-289
Private equity firms make their money by buying into companies and recommending operational changes that boost profits. They are a lot like venture capital firms except that they invest development capital rather than start-up capital.
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When the figures of the company they’re turning around have increased sufficiently, they generally sell up and take their profits.
The money they invest in the first place comes from a mix of institutions and ‘high net worth individuals’ […] they charge a management fee of 2 to 3 per cent […] and then take 20 per cent of any gains.p. 290-291
I sat down with one private equity company after another and asked them a bunch of questions.
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I realised that none of them had ever run a business.p. 291
I was like Yul Brynner assembling the Magnificent Seven, looking for an expert in every field of private equity combat.p. 296
In most private equity funds 80 per cent of the profit goes to the investors, but, as Hamilton Bradshaw would be keeping everything it made, it meant I could give my team a very tempting profit-share package.p. 296
. . .
For a lot of businesses, having to wait for cash is a higher price to pay then their modest fee.p. 297 Not the case so much now-a-days
surprisingly few people know how to correlate cash and profit.p. 298
I knew that financial engineering like this is what frequently enables entrepreneurs and investors to make money.p. 302 Referring to how they acquired a building and refinanced it after they got their company as tenants
There comes a point in every market where the prices get a bit silly, and that’s when you should sell and take your profits.p. 303
But the real opportunity here was David: he was bright, eager well connected, and he’d done his research. […] As always, what I had really invested in was the person.p. 303
Hamilton Bradshaw is a boutique. Typically, we invest less then £10 million in each deal and we look to make two or three investments a year. We get hundreds of approaches and of those I reckon we take about twenty seriously. Of the twenty, we reject half because the deal doesn’t stack up, and the rest we spend a lot of time on.
I find that the £1 million to £10 million market is a very exciting place for us to be
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I would say that the average private equity firm has £250 million under management – maybe even closer to £500 million – and when you’ve got that much money it’s not economically viable to spend your time on a £5 million deal.p. 304-305
One of the key things I’ve learned since starting the company is how to structure a deal. Typically, I look to take a 60 per cent stake in a target company, leaving the rest to the founders and management team who will drive the venture forward. […] I’m only interested in investments where we all win.p. 305 How to structure a deal, or in other words The Art of the Deal
Whatever problems a company has – sales, cashflow, legal structure, premises, anything – I have someone on my team who can find a brilliant solution. In fact, the most important thing I look for when I make an investment is our ability to add value.p. 306
It’s just the way we are as human beings; we don’t want to appear stupid and say things like, ‘I don’t understand the board pack.’ But I’m not like that.
‘I’m going to put my hand up straight away. Ian, forgive me, but I don’t understand this. Can you explain it to me?’
It might sound really weird, but nobody ever says that.p. 307 Most people are complacent. And most people are afraid of looking or feeling stupid which is where you have your edge
the board knew exactly what needed to be done without me having to tell them anything: all I had needed to do was ask the right questions.p. 308
gently asking relevant questionsp. 308
introduced share option schemes to incentivise the workforce, more efficient management structures […] All these changes were in response to me asking a question and the team coming up with the answers. I didn’t have to do very much; it was down to them.p. 308
new vigour, new purpose and a clearer sense of directionp. 309
the classic 80:20 ratio where 80 per cent of their profits came from 20 per cent of their products.p. 311
They say in business that your best loss is your first loss. What they mean is that, when you look at the books and you see a loss, you have a chance to get out before the next set of accounts arrive with an even bigger loss marked out in red. […] Don’t catch a falling knife.
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Sometimes, out of pride people in business carry on just to prove a point or not to lose face. That’s not me: we failed, we recognised it, and that meant we were able to limit our losses to the cash we’d already spent.p. 314 this relates to biases
the ability to get into a business and create change.p. 338
I offered to return a per cent of equity for each year he hit his targets.p. 340
claw-back dealp. 344
why someone would pay money for itp. 346
Products don’t sell themselves, markets dop. 346