Review of Art of the Deal by Donald Trump (with Tony Schwartz)

Whenever I mention Donald Trump to my friends, the initial reaction is disgust.

“He’s not a real businessman, he inherited his money.”

“He’s just  another slimy rich bastard out to make money off of glitz and glamour.”

Like most people, I  have been exposed to one aspect of his personality through his television show, The Apprentice, and like most people, I have read about the casinos, beauty pageants, and the lavish Trump Tower in newspapers and magazines. However, I wanted to see for myself whether or not Trump’s success is born from his upbringing and family background or whether it is the result of shrewd business tact. I figured the best way to do that would be to read his well-known known book, The Art of the Deal. I have divided this review into two sections: My Review and What I Learned (and can apply to my own business life).

My Review

Should you pay $8 on amazon to read this book? First of all, no, get it used. Second of all, it really depends on what you are looking for. If you’re looking to better understand his rise to fame and fortune, then yes. It’s really remarkable the juggling acts he performed as a real estate developer, often times having to convince multiple parties to agree with him and get on the same page. It’s even more impressive how he mitigated risk, persuaded lawmakers, businessmen, and city officials (despite having no track record), and used the press to his advantage.

If you want to be an entrepreneur, I’d say that this book is not a “must read.” As a real estate developer, Trump is far more of a businessman than an entrepreneur. Of course he spots opportunities and organizes resources to take advantage of new high risk ventures, but I think he really shines more as a businessman. When you think about the word “deal,” you’ll get a better understanding of what this book is about. In simple terms, a deal is an agreement where one party is selling and one party is buying. One party is doing the persuading and the other needs to give the “okay” or buy into the opportunity. Negotiations simply refer to deciding on the terms of the deal, whether that be price, ownership, or future privileges. So, this book is about Trump convincing a lot of people to buy into the opportunities he creates, and he does it brilliantly.

If you want to be a businessman or an entrepreneur who also manages his or her venture, this book will be invaluable. It gives an in-depth look of how negotiations work and how to manage people. It’s also interesting to see how Trump partners with other businesses in order to give his projects more profitability and authenticity.

Is Trump a real businessman? It’s true that he had family money and was able to learn about the real estate business from a young age from his father, but financial resources are not what cause success. If that were true, investors wouldn’t care about business teams. I believe what determines success in business is how well you use all of the resources available to you, be they financial or social. It comes down to your business skills and who you are as a person. Without a doubt, Trump is a brilliant businessman and would not have been able to attain the level of success he now enjoys were it not for his passion, ability to understand people, and knack for spotting opportunities.

Another rich bastard who only cares about money? I think that caring about money is part of what develops your hunger in the early years of business, but there also needs to be a stronger desire to build something that wasn’t there before. From all of the business men and women I’ve read about, I’ve come to the conclusion that you either need a passion for the game or a passion to create. Let’s be honest, if all he cared about was money, he wouldn’t still be in the game making deals. I think he genuinely enjoys the game and is playing it for life.

What I’ve Learned

Business is people. There is no other way to say it. Reading this book has shown me that developing relationships can go a very long way and that learning how to persuade others while still maintaining integrity is invaluable. That also means it’s important to know your customers, which Trump did by constantly asking questions to understand how people viewed the world, his ideas, and his products

You are only as good as your product. Donald Trump would spend so much time and energy making sure he created quality products and delivered on time. It built into his reputation over time and made for smoother sailing in later years.

Mitigating Risk. I was surprised the steps that Trump would go to to mitigate or in some instances almost completely eliminate risk. At the same time, he knew when to take the calculated risks. It’s very smart business tactics and I think that people who play the game in the long run all have this in common.

Psychology. I’m a big believer that talent will only take you so far. Maybe that’s because I don’t think I’m a born businessman or entrepreneur. But one thing I’ve seen over and over again is successful business people saying that in the long run what has made them successful is complete focus on improving their skills and producing quality work. Trump is no different and I think that the psychology he has developed has played a large role in his success. Thinking Big. Dreaming. At the same time, taking action and focusing on the present project at hand. In the realm of psychology, he also taught me to leverage “public anticipation” and “sensationalize” in terms of public relations and marketing.

Conclusion

I really enjoyed this book! Especially the early years when he was first getting started. The idea that he started with $200,000 right out of college is kind of astounding, but it’s in no way the hundreds of millions of family money that people make it out to be.

“To me it’s very simple: if you’re going to be thinking anyway, you might as well think big.”

Who Are Your Heroes?

With the new year just around the corner, I’ve begun to reflect on how my life has changed in the last twelve months. One of the most distinct indicators of how my goals and aspirations have changed is my new list of heroes. Before I tell you about my heroes or role models, I’d like to invite you to examine who you look up to in your life now and how that has evolved over the years. What qualities do you admire about them? What actions have you taken to emulate their achievements or lifestyle? In what ways do you identify with their life story?

I think there is something important to be said about what a hero is. To me, a hero represents possibilities. “If he can do it, so can I!” It’s someone whose story holds emotional weight. Not only do you admire their achievements, but more importantly, you see a part of yourself in these men and women. You may have the same desires or goals, come from a similar background, or have the same outlook on life. It doesn’t really matter how you connect, just that you connect. That’s the difference between someone you hold in high regard and someone that’s a hero in your life.

I think it’s important to have heroes because it makes climbing the mountain much easier. It’s far less difficult to attempt something if you’ve done it before and succeeded, but it’s also less difficult if someone you identify with has achieved a goal that you are reaching after. Lastly, I feel like having heroes represents a challenge. Not necessarily to attain the same level of success that they have, but to be daring enough to chase your dreams, even if you might fail.

My heroes have changed so much in the past year and a half, probably because  my dreams have changed. Up until last fall, I had never taken a business course, didn’t know the difference between a stock and a bond, thought that economics was just a subject about confusing graphs, and abhorred the notion that I lived in a capitalistic society where people only care about money. I distinctly remember making an argument to my parents that I wish we lived in an economy where everyone was paid the same amount so that I wouldn’t have to worry about money and just spend my days writing fiction. Boy, have my views changed!

My wall of heroes now includes:

Warren Buffett. Unlike so many money loving dishonest businessmen, he is actually passionate about investing and business and wants to make the world a better place. I, along with the rest of the world, really connect with his down to earth manners, practical investing style, and humble outlook on life. I think he has built a company unlike the world has ever seen before and has done it by playing by the rules and working hard. To me, he just represents the opposite of all this high brow men in suits corporate nonsense.

Andrew Carnegie. After reading his autobiography, I felt compelled to add him to the list. Like Warren Buffett, he had such a caring disposition towards his employees and partners, played the game honestly, and was still able to amass a business empire. I think the difference between achieving something and achieving something while maintaining integrity and later striving to give something back is the difference between a man and a great man.

Felix Dennis. I identify with Felix Dennis because represents the quintessential rags to riches tale and was daring enough to craft the story into a book. I like how he titles the book “How to get rich.” I hate how there is some kind of stigma associated with wanting to be rich, and most people just say “I want to be a successful businessman.” I also love him because he has this no nonsense attitude towards life. He cuts the crap and tells you how it is. On top of all this, he’s a well known poet!

Sylvester Stallone. Another underdog story. I’m guessing everyone has seen Rocky.

Alexander the Great. Does this really need an explanation?

Arnold Swarchenegger. One of the downsides to having heros is that you sometimes have to concentrate on their achievements rather than their personal life. Let me put it out there now that I don’t admire him at all for the way he’s treated women. However, he is a great inspiration to me both in the gym and out. If you get a chance, watch some youtube videos of his “rules of success.” It’s incredible how he’s gone from a nobody to a body building champion to a movie star to a public servant. I like how he asks himself what he wants and then just goes out and does it, not matter how many people criticize him.

Tony Robbins. I mainly view him as a hero because of his life advice. For those of you who don’t know, he’s a compelling motivational speaker and actually is one of the people who started me off with the “modeling” mentality. Picking models and emulating their life outlook, psychology, and actions has helped me gain some success in the gym and I hope this will translate to the business world.

Tom Cruise. Again, sometimes you have to ignore their personal lives. The reason Tom Cruise is on my list is that every time I have to give a presentation, I try to picture the way he speaks in my mind and imitate that sheer force of conviction. It helps that he’s the same height as me and at the same time is still able to give a passionate performance that moves, intimidates, and excites people. It just seems like every word he says is so definite and has such power. I’m not saying that what he says is actually meaningful. It’s the way he says it and his facial expressions.

Leonardo DiCaprio. Have you ever listened to him in an interview? If not, you should. He has this idea that every movie choice he makes should be more challenging than the last. It forces him to grow and be a better actor. That’s the kind of life I want to lead. Instead of shying away from challenge and possible failure, seeking it out. With so many people watching, it would be pretty devastating if he failed, but I guess he reasoned it’s better to step up to the plate than act in a B rated movie that might get commercial success but not help him improve his skills.

Will these people change by next year? Probably. Will my dreams change? I kind of doubt it because I feel like I found what I was meant to do with my life. Maybe though, who knows. These are my heroes. Have you thought about yours?

 

Review of The Intelligent Entrepreneur by Bill Murphy

I picked this book up at a Waterstones in London. The first thing that caught my eye was the word “intelligent” in the title. It reminded me of The Intelligent Investor by Benjamin Graham. I’ve always believed that there is a smart way to go about achieving a goal and a not so smart way. Whether it’s been fitness, writing, or now business, I’ve read everything I could get my hands on to increase my chances of success. Everyone is born with both talent and the ability to acquire skill. Talent is a natural inclination to be good at a particular discipline. Skill is achieved from hours and hours of beating on your craft. It’s learned. So, the first reason I picked up this book is that it has the same outlook on entrepreneurship as I have: it can be learned, and it can be taught.

The second reason I picked up this book is that after you’ve read books on business, gone to lectures, and competed in competitions, a lot of the “rules of success” tend to be repeated (which is good, it means they are true). However, I feel like it would be a waste of my time to read a book that simply lists some pieces of advice. I wanted to learn from book centered around entrepreneurial stories because they more compelling, they are inspiring, and you get to see how other entrepreneurs tackle business problems.

Lastly, I’ve had great experiences with Harvard in the past. I took two classes there during high school to learn about creative writing and screenwriting. The teachers were wonderful, but more importantly, the books I was introduced to were seriously life changing. I hoped that this book would follow suite.

What follows are my thoughts on the book. After that, I’ve included a section about what I’ve learned and what I plan to do now that I have read it.

My Review

Okay, let me first say that I really enjoyed this book and found it both compelling and informative. I’m happy for spending my 16 dollars and would gladly spend it again to read this book. However, you must go into this book knowing that about 30 percent is going to seem like a sell for harvard business school. I don’t know if the author intended that, but that’s the way it comes across. That being said, I learned so much from the stories of these three entrepreneurs and the author’s ten rules of success.

I’m genuinely surprised this book hasn’t gotten more press attention or reviews. There are only like 3 reviews on amazon. Being a young and hopeful entrepreneur, I really identified with all of the people and think Murphy did a great job with the style and format of the book. There is this one paragraph in the book that really stuck with me through all the chapters.

“As you read their stories, I hope you’ll keep in mind that they are living, breathing human beings who started out just like most of us- With a hunger to succeed, but also with the usual array of fears and insecurities. Each of them sat alone in a room with a blank sheet of paper and developed an idea. They wrote business plans. They attracted teammates and partners. They raised money. They built prototypes. They launched; they built brands; they scaled up their businesses.”

I didn’t realize it until I started meeting real entrepreneurs, but when you don’t know someone who has actually taken the leap, the possibility of success in an already mysterious discipline seems very intangible and distant. Like he said, these are REAL entrepreneurs who are alive today. So many times the media makes successful people out to be two dimensional, like Andrew Carnegie. I’m glad Murphy presented these individuals as three dimensional personalities and explores their inner motivations, fears, and dreams.

Overall, I would give this book a four out of five stars. The ten successful rules of business complemented by the entrepreneurial stories makes this a fascinating and informative read, but you have to ignore the sales pitch for HBS. Otherwise, you’ll probably end up putting it back on the shelf after a quick glance.

What I’ve Learned

There are so many things I learned from this book. I strongly encourage budding entrepreneurs to read it, not just for the lessons, but to see how other businessmen solve problems. While competing in my first business competition, I was able to contribute meaningful ideas because I’ve read about problems businessmen face and their solutions. If you would like a PDF or word doc of my notes, you can contact me. For now, I’ll just give an abbreviated version. I’m going to concentrate on new lessons I learned, meaning those that I have not been introduced to before.

The #1 thing I learned from reading this book is that there is nothing fancy about coming up with an idea and starting a business, but the truly successful businesses are built around a solution to a problem that is shared by many people. As I read about how each of these entrepreneurs began, I kept thinking to myself: wow, I can do that.

For example, Marc Cenedella, the founder of TheLadders.com, began assessing demand for a high income jobs website by sending out a free newsletter every week to his friends and colleagues that listed upwards of 300 high paying quality jobs he’d found advertised on the internet. As he got feedback from his friends and gained subscribers, he realized there really was demand for this website service he had been dreaming up.

Aside from learning that there isn’t anything fancy about thinking up an idea and testing it, I learned to build my business ideas around problems I observe in my life. Often times, I tend to come up with clever business ideas that sound really interesting, but that might not solve any type of problem existing in the market. The best businesses provide a solution to a problem and the bigger the number of people who share the problem, the better the potential for the business in the beginning years. In addition, the author argues that it’s best to focus on problems you encounter in your life, because you then will understand your potential customers best. Most of these entrepreneurs ended up being their business’s “ideal” customer, which gave them insight into consumer behavior.

Another lesson I learned is the difference between pleasure and pain businesses and good business ideas vs. bad business ideas. I don’t think I can explain this better than a quote, so here you go:

“Does the problem you’ve identified relate to the promotion of pleasure, or to the prevention of pain?…Pleasure businesses solve less urgent problems. They can sometimes be great, but the success rate is much lower.”

The last important lesson I learned is to dream big and to strive to build a scalable business. I’ve always been kind of afraid to dream big because when you tell people something like “I want to be the leading company providing educational study tool videos online,” people look at you like you’re crazy. If you’ve actually accomplished that goal and then in interviews look back and say this is what your mission was, then it just makes you look like a baller. But if you say it before you’ve done it, I’ve found it can turn people off because they think your head is too far into the clouds.

This book encouraged me to keep dreaming big because having that mindset completely changes the way you make decisions and build your business. In the book, it could have been the difference between Marla Malcolm Beck being the founder of a multimillion dollar cosmetics company, bluemercury, or the owner of a few cosmetic stores in Washington, DC.

After reading this book, I think I will search out some business case studies so I can feel more comfortable with making and analyzing decisions. In addition, I’ve decided to participate in the george washington university business plan competition with a problem centered idea. Wish me luck!

Started another blog!

Dear Readers,

I’ve started another blog which can be viewed here. Yes, I’m still going to contribute to this one. I’m in the process of reading The Intelligent Entrepreneur by Bill Murphy. This new blog is centered around an obsession I’ve developed over the years: bulldogs. My mission is to make you smile and maybe, just maybe, my unhealthy love for bulldogs will rub off on you.

Yours,

The Thought Hole

CitySpark Big Ideas Competition: My first business plan competition

The CitySpark Big Ideas Competition at City University was the first business plan competition I’ve ever taken part in. A few weeks ago, I competed in my first business competition. The post can be viewed here. Also, to view the official City University press release, click here.

When I first saw a poster in the hallway for the CitySpark business plan competition, I thought of it largely as being a one time event. I thought you would spend weeks writing up your plan, submit it, and then you would pitch and it would end there. What I soon came to understand is that CitySpark is more than an event, it’s a coaching organization for entrepreneurs, and more importantly, a community.

For those of you who know me, you know I’ve done a fair amount of reading about business. Whether it’s Andrew Carnegie’s Autobiography, Rich Dad Poor Dad, How to Win Friends and Influence People,  or watching hours of interviews of Warren Buffet, Richard Branson, or Felix Dennis, I’ve always sought to learn more about this mysterious world of entrepreneurship. However, nothing compares to the amount of valuable information I’ve gained from the presentations by various CitySpark representatives, entrepreneurs, and investors. Should you decide to enroll in this competition or any business plan competition, take advantage of the presentations leading up to the event! Especially if they bring speakers who have real entrepreneurial experience.

In addition, if you know me, you know that I’m very fond of accomplishing tasks independently and, whether its exercise, school, or writing, take pride that I don’t need a community for motivation or help. If  I can’t accomplish the goal on my own, it means I need to dig deeper, find that hunger, and develop the kind of drive that will sustain me through the bad times. Unfortunately, this kind of mentality isn’t the best for business success. I quickly learned that cooperation and networking are invaluable for getting an idea off the ground.

As an introvert, the idea of “networking” was about as appealing as working the rest of my life for an employer. However, when I began to attend the CitySpark networking events, I was astounded by just how easy it is to talk with other people about business, entrepreneurship, and new ideas. Why? I think it’s simply because when you really are passionate about something, its that much easier to hold a conversation. It’s almost like there was an instant bottom line of rapport because everyone is interested in the same things. It can be very difficult convincing friends to back your business idea or to work for you (in return for equity) for free when they have a different mentality, but when you are with people who have a similar mindset, suddenly an enterprise seems much more possible.

Through the networking events set up by CitySpark, I met my competition partner, and even though I’m going back to America, I know that our business relationship and friendship will continue into the future. Never underestimate the power of being with a group of people with similar interests and similar goals. It’s not about competition, it’s about cooperation!

There is no substitute for meeting real world entrepreneurs. Nothing compares to talking to someone who has literally put his house on the line, used credit cards, all in the pursuit of a dream. You read about these people, but until you attend events like these, you never meet them. Let me just tell you… It’s an extremely powerful experience.

The last thing I want to say about my CitySpark experience is that should you decide to participate, take advantage of the mentor scheme. I was lucky to have an extremely dedicated and at the same time ruthless mentor who honestly criticized our idea, but not to the point where we were discouraged. Sincere feedback is very valuable. Family and friends don’t cut it.

Now, a bit about the competition. Note: this was an executive summary business plan competition, not a full business plan competition. The results? No, I didn’t win. Am I angry? No. Here’s the thing you  need to know about business plan competitions like these… you can do months of work, do everything in your power to demonstrate that there is demand, that there is a target customer niche, that the business model is profitable and sustainable, and that you have advisors and partners who will help get this off the ground, but unless the judges fully understand all of this within the time limit of five minutes AND believe you are passionate about the project, you will not win. Yes, you can be passionate, yes the business might have a high chance of success, but unless you communicate that and they believe it, you will not win.

Also, note that in executive summary competitions like these, the judges may not even read your business plan if they have so many to get through. It’s all about the pitch and your enthusiasm. Have you thought about it a bit and do you have enthusiasm for the project.

So how do you win? Well, this is simple, but it all comes down to what the judges think of your presentation. Unless you communicate in a way the judges like, you won’t win the specific competition. Does that mean your business won’t work? Of course not! You can have the best business plan in the world and maybe in a month you launch the company and it is extremely profitable. Does losing mean you don’t have business aptitude? Not at all! It means you need to work on your presentation skills (unless the judge had a question about the business plan you couldn’t answer, in which case you need to address that). I can’t stress enough that you need to have this mentality when going into one of these competitions.

I am something of an opportunist. I believe that in the long run, business skills and the ability to analyze opportunities is what breeds success. As Felix Dennis says…

“If you never have a single great idea in your life, but become skilled in executing the great ideas of others, you can succeed beyond your wildest dreams. Seek them out and make them work. They do not have to be your ideas. Execution is all in this regard.”

I thoroughly enjoyed this competition. I have learned so much about entrepreneurship and have made invaluable connections. It’s wonderful to be able to meet people my age who have the same goals as myself. Being young, whenever I’ve become doubtful about my future success as an entrepreneur, I  remember that it is the people around me who will be the successes or failures of the next generation. Make sure to surround yourself with people you love working with and who are just as passionate and driven as yourself.

My closing quote also comes from Felix Dennis:

“When the going gets tough, when all seems lost, when partners and luck desert you, when bankruptcy and failure are staring you in the face, all that can sustain you is a fierce compulsion to succeed at any price.”